Recently in Convergence Category

Today, HP is announcing a new push into the digital content market, repositioning its network and service provider business as HP CME (Communications, Media & Entertainment). HP has been serving the telecommunications and entertainment sectors and feels that it is in a unique position to work with these industries as they converge through the opportunity presented by digital content (please see my earlier article today, "HP at the 'Crossroads' Between Telecom and Entertainment.")
 
I wanted to get some insight into the drivers behind this new strategy, so I asked Joy King, worldwide marketing director for the newly constituted HP CME, to respond to some questions. Here are her responses in question-and-answer format.
 
 
1. Thanks for agreeing to respond to some questions, Joy. Maybe you could tell us in a nutshell what HP CME is and what the key drivers are behind its formation.    
 
HP's Communications, Media & Entertainment business is an organization in HP that delivers solutions and services to three customer segments -- service providers, equipment providers and media/entertainment companies. Total revenue of HP CME is about $9 billion, or roughly 10% of total HP revenue (includes sales of solutions specialized for CME industries -- as well as all HP products (servers, storage, PCs, services).
 
But the announcement we are making is really a strategy story -- it outlines the specific actions and investments (both financial and human resources) that we are taking to enable the growing opportunity represented by the explosion of digital content and its delivery/management across communications networks. 
 
 
2. HP's announcement mentions that telecom and entertainment companies have "mutual opportunities in a larger, converged 'ecosystem.'" Could you explain more what you mean by an "ecosystem"? What do you think that's going to look like as it emerges over the next several years?    
 
We truly see a converged industry rather than two independent industries trying to work together.  With the explosion of digital content, both remastered content from huge asset libraries like Time Warner and new digital content from emerging content creators like Dreamworks, the opportunity to deliver very personalized, very content rich services to consumers and professionals (or 'prosumers'!) across a variety of networks (fixed line/wireless, broadband, etc) to a huge variety of devices (digital TVs for home entertainment, PCs and notebooks for office/web, cell phones/handhelds for mobile, and gaming devices, etc) is really tremendous.   
 
HP's role in this newly converged industry will be one of enablement through technology -- technology that is both based on standards but also customized for the specific needs of these companies. For example, the HP Media Storage offering is based on core HP storage arrays for IT data centers, but is significantly enhanced to meet the special needs of the media and entertainment industry (i.e. rapid retrieval of enormous video files). Another example is HP servers for telecom network and service providers; they are standards-based, commercial technologies proven in the IT world -- but enhanced to carrier-grade standard to meet the special needs of the telecom industry.
 
 
3. What should communications service providers be doing right now to take advantage of the convergence trend?  
 
They should be taking several steps .... First, they should consider how to extend their OSS/BSS systems to enable service management, revenue assurance and billing for content based services. Second, they should be evolving their networks with service delivery platforms that can speed the creation and provisioning of these new services. 
 
 
4. What makes HP a logical provider and partner in this market space?   
 
HP has a very unique position here ... we have the technology and understanding of the digital content business to help content companies develop (HP workstations and HP imaging products) and distribute (HP Digital Media Solution and HP Digital Media Storage) their content, but we also have -- and this sets us apart from all other classic IT competitors -- a deep understanding of the very unique and demanding requirements of the telecoms industry.  With this dual, "crossover," experience, HP is the partner trusted by both industries to deliver technology at the convergence point. 
 
 
5. What are some of the products and solutions we can expect to see coming out of this new initiative?  
 
You should expect new editions of our Digital Media Solutions portfolio, plus enhancements to our Service Delivery Platform to enable more effective content rich services (through gateways and servers like the OpenCall Media Platform) as well as enhancements to our Integrated Service Management (OSS) and Convergent Charging/Billing solutions to make the management and billing of content rich services a more seamless process for our customers. 
 
 
6. What's the most exciting thing about the emerging convergence scenario and HP's position in it?  
 
From a personal point of view, I'm excited about the new services that will be coming to my digital home, my mobile devices and my office desktop! 
 
And from a professional perspective, I think this is an enormous growth opportunity for both content companies and communications companies to create new revenue streams. Of course, it's a growth opportunity for HP too, particularly for our specialized solutions and integration services for telecom and media/entertainment companies, but also for HP's across-the-board products such as high performance servers, middleware and software, personal devices and storage.
 
AB -- 5/31/06
 
 
 
HP is announcing new digital-content initiatives today (31 May 2006), positioning itself at the "crossroads" of the converging businesses of telecom and entertainment. The company is renaming its network and service provider business as HP Communications, Media & Entertainment (CME), increasing its "investment in solutions that address digital content management and distribution," hiring a new executive to head up the CME division, and increasing its sales coverage in connection with the new efforts.
 
Joy King, director of worldwide marketing for CME, tells TMCnet that HP sees telecommunications and entertainment turning into "a converged industry rather than two independent industries trying to work together." The explosion of digital content, she says, creates "the opportunity to deliver very personalized, very content-rich services to consumers and professionals (or 'prosumers'!) across a variety of networks -- fixed line and wireless, broadband, etc. -- to a huge variety of devices -- digital TVs for home entertainment, PCs and notebooks for office and web, cell phones and handhelds for mobile, and gaming devices, etc."
 
In today's announcement, HP says service providers are rapidly moving out of the voice business in a "fast-moving market" that requires them to "bring to market thousands of personalized services -- voice, data and multimedia -- to stay competitive." This has put service providers in search of content. From the entertainment side, digital technology is transforming the process of creating and distributing content and the way in which it is consumed.
 
HP says the two industries together make up about 10 percent of its revenue, or $9 billion, and that the company is in a unique position to serve telecom and entertainment as they converge.
 
Its telecom and IT experience give it the capability to deliver network infrastructure, service creation, delivery and management framework, migration to IMS (IP Multimedia Subsystem), and operations and billing systems. As an example, King points to HP's servers, which are "proven in the IT world" but have now been "enhanced to carrier-grade standard to meet the special needs of the telecom industry."
 
On the entertainment side, HP says it can provide server platforms for creating content, workflow environments for management and distribution of digital content, and media storage. "The HP Media Storage offering," King tells TMCnet, "is based on core HP storage arrays for IT data centers, but is significantly enhanced to meet the special needs of the media and entertainment industry -- i.e., rapid retrieval of enormous video files."
 
The telecom and entertainment roads converge at the devices consumers use to access content -- wireless portables, handhelds, TVs and projectors and other devices, and HP operates in this space as well.

Earlier this week, Peter Svensson, technology writer for the Associated Press, voiced a concern that is leading the country toward a multi-tiered Internet scenario, under which ISPs would be able to charge more for users or for content providers who take up more bandwidth.

In his article "High-Def Could Choke Internet, ISPs Fear," Svensson says ISPs and cable and phone companies claim that the Internet isn't built for transfers of video at rates anything like the volumes common among U.S. TV-watchers. As things stand now, the Internet has no problem accommodating normal web browsing, emails and the occasional file download. "Small clips are fine," Svensson writes, "but TV-quality and especially high-definition programming could make the Internet choke." Not all experts agree that usage is likely to overtake capacity any time soon, but the possibility has providers worried -- and lobbying heavily for a non-neutral Internet.

Recently some commentators have suggested that peer-to-peer (P2P) file-sharing could offer a solution to the problem, since it decentralizes file transfers, instead of requiring them to travel through networks in large concentrated streams. I first ran into this idea in Robert X. Cringely's essay, "Why P2P Is the Future of Media Distribution Even If ISPs Have Yet to Figure It Out." (See my March 16, 2006, entry, "P2P Enables Large-File Media Distribution.")

In fact, this appears to be the thinking behind the announcement from last week that the Warner Brothers movie studio is contracting with file-sharing company BitTorrent to distribute movies and TV programs using its P2P software -- see BusinessWeek's article "BitTorrent Goes Hollywood." Here's how the article describes the delivery strategy:

"Distributed delivery is attractive because the technology downloads files by collecting bits and pieces of it from many sources, rather than putting the burden on just one source. That means it costs next to nothing for content owners to distribute movies or music -- a huge advantage over the current approach, in which files are streamed over individual servers and the massive amount of bandwidth required for video can run up huge bills."

P2P software is a fitting and natural application strategy for the decentralized Internet that works best when the intelligence is placed at the edges. And In spite of its widespread use for illegal music downloads, I've always felt that P2P file-sharing was an intriguing technology that would eventually lend itself to legal business models.

AB -- 5/16/06

Recently I received a public relations pitch under the intriguing subject line, "Pardon me, but do you read while you're umm … uhh … hmm … on the john?"
 
It was too intriguing; I bit. I'm an admirer of PR hacks who know how to inject some originality into their pitches. I opened the email. The first paragraph provided some research data following up the question about reading in the rest room:
 
"If you do, you’re most definitely not alone. Although toilet reading statistics are hard to come by, a 2005 survey by Cancer Research UK found that 1 in 2 men and 1 in 4 women readily admit to reading whilst on the loo."
 
I did wonder for a moment why a cancer charity needed to investigate this question, but the PR rep for QuickPlay Media was trying to lead me in a different direction: "How does one slip into the rest room without drawing attention to the latest news they plan to pursue on the can?" A perplexing question.
 
The answer? Mobile content! And why not? Your cell phone is always with you -- no need to discreetly tuck a book or newspaper under your arm -- nobody will comment or even notice if your mobile phone is with you -- it's the normal way of 'doing business.'
 
QuickPlay Media, no surprise, is in the mobile content business, and this unique PR pitch does highlight one value of mobile content packages: the ability to deliver small chunks of content that consumers can enjoy during brief dead-times, such as standing in line, waiting for a meeting or appointment to begin, or letting nature take its course.
 
QuickPlay calls this "content snacking" (a metaphor not exactly appetizing next to the bathroom scenario, but I can live with it), a habit that "is changing the way we look at mobile devices and the way we access media and entertainment."
 
I was interested in understanding this "content snacking" trend better, so I asked QuickPlay Media's marketing director, Mark Farmer, to respond to some questions about mobile content. His comments are below.
 
Please explain what you mean by "content snacking."

Mobile video provides informative and/or entertaining clips. These short video clips can be used as a way to pass time when waiting in line or can be used to acquire accurate, timely information when it is most critical. Content snacking is the behavior that mobile is creating. It refers to a short period of time that is desired by the user to obtain the desired information. This is not a replacement for a TV, but rather an opportunity for rich entertaining and informative content while away from a TV or PC.

How can mobile content meet the needs of consumers in unique ways?

Mobile allows people to get timely updates wherever they are … whether it is the stock market or the hockey game, instant access to scores and figures allows the user to move freely around the country without worrying about lugging their laptop or waiting for the game to finish to leave the house.

We are beginning to see some trends towards mobile exclusive content being designed with alternative endings for programs or exclusive behind-the-scenes footage. Mobile entertainment and information also provides an engaging means to be entertained and interact when it isn’t convenient to do so by another device. It’s small, reliable and the network's ability to deliver outstanding coverage and service continues to increase. Each day, new content is added to the video environment offering a wide range of items that are of interest to a variety of ages and demographics.

Lastly, companies such as QuickPlay Media are developing products to enhance the user experience: allowing the user to spend less time looking for content and more time enjoying it.

How is mobile content different from other forms of media?

Mobile content is comprised of short, quick, informative and engaging segments. People who look for information on their mobile phone want it quick. They want to be able to find it, get the information they are seeking and move on. Even when they are looking for entertainment, no one wants to spend more time looking for it then they would enjoying it. The mobile screen is also much smaller than the television screens that seem to continue to grow. Mobile content needs to be developed specifically for mobile with clear images and good quality sound, so that users continue to come back and enjoy new segments and features.

Where do you think the mobile content industry is heading? What do you predict for the future?

The mobile industry has exploded in the last decade. The mobile phone, once an emergency-only device, has now become an object that many individuals are never more than 10 feet away from 24 hours a day. We also see individuals become increasingly reliant on the mobile phone to the point where many people no longer have a traditional home phone line and have elected to have just a mobile phone with a great plan.

Dramatic improvements have been made in the mobile industry. The capabilities, features and size of the handsets have continuously improved, as have the speed and design of the networks. We have also seen developments where the mobile industry has helped to fill some consumer needs such as GPS tracking systems on phones for both the emergencies and locating your tardy teen.

The future will only get brighter for mobile. Predictions for the future include a real movement toward convergence -- having one small, reliable, convenient device that can provide the full spectrum of information and entertainment options. Other areas that will develop include  mobile payment options in-store, and using mobile as a means to distribute information such as news alerts and couponing. We will definitely see a growth in functions that are attractive to women, which may include a means to have a grocery list easily on hand, recipe delivery on mobile screens, alerts for sales at favorite retail outlets, mobile content designed for the busy mom on the go, and tools to keep track of the family.

How will advertising fit into the emerging mobile content industry?

Advertising and sponsorship will eventually become more involved with the mobile content industry. Today mobile consumers are used to paying for much of their content and time online. A very different model from the Internet! Given the snack sized consumption of content typical on mobile, advertising will need to be less intrusive so that the level of promotion to actual content the consumer is interested in will stay reasonable. We will see marketing develop new and interesting ways of incorporating their brand into mobile content which may take the form of customized content, product integration, brand sponsorships or advertising augmenting the cost of the video subscription or segment to offer content at a reduced price to consumers.

Tell me about your company.

Since 2004, QuickPlay Media has been a leader in compelling, interactive mobile video experiences.  The company is dedicated to delivering superior user experiences that extend content into the exploding mobile market. Its partnerships and technology platform enable a simplified connection between media, mobile service providers, content providers and consumers across a variety of digital media, networks and devices. The QuickPlay Media technology platform is supported by a team that combines deep expertise in both the media and mobile telecommunications industry.
 
QuickPlay Media was the first to launch Mobile Video Service to the Canadian market with service to leading carriers Alliant Mobility, Bell Mobility, Rogers Wireless, SaskTel and Telus Mobility.
 
In the United States, QuickPlay Media has launched the ESPN Mascot application; the application provides multi-tabbed navigation to access news, scores, standings, stats, rankings and more, while the fan's favorite team logo is on display.  Some unique features include items such as the news tab, which is able to display the latest happenings in the US college sports world, and when available images are provided within the story.  
 
Also, QuickPlay Media has recently launched Pocket VH1. Pocket VH1 is VH1 on the go. It leverages many interactive elements into one application that immerses the audience in the VH1 experience. Users are updated with daily pop culture features, flipbook image galleries and up-to-the minute news items that are presented within large scrollable thumbnails. By utilizing tagged content, Pocket VH1 offers the ultimate interactive experience enabling display of photos and video in one seamless step. All of the content is stored in QuickPlay’s Interactive Mobile Platform.
 
What value does QuickPlay Media offer for the content provider?

QuickPlay Media assists the content providers in expanding their consumption network by providing a new channel of distribution. We eliminate the technical complexity in bringing their brands and content properties to mobile. Complexities like content management and delivery to various devices with even more different formats for content are handled by our platform technology, as are critical items like integration to carrier billing and content delivery systems. Having already done this for 10 of the largest carriers in North America, we understand what it takes to launch these services into complex technical environments with the reliability demanded by the carrier.

How about for the service provider?

For the service provider, QuickPlay Media has developed another reason for individuals to use their phones. Video and interactive data driven services provides another revenue source for service providers and delivers on the convergence model many of these carriers are striving toward. The more 'all-in-one' services a device can provide, the more it will be relied upon and used. Video is another means to engage a new audience and maintain an existing customer by continuing to offer new and exciting service options.

AB -- 5/9/06
 

Recently I learned about Network Foundation Technologies (NFT), a company providing an Internet broadcasting platform based on distributed computing. This is an important story to tell, as many observers think peer-to-peer technology looks like the best answer to the problem of Internet-based video streaming (see my previous blog entry, "P2P Enables Large-File Media Distribution," from March 16, 2006).

NFT's model depends on a distributed network of users who receive a video transmission as their computers and Internet connections are simultaneously being used as repeaters to distribute the stream to yet other users. Mike O'Neal and Marcus Morton are co-founders of NFT. O'Neal is chair of computer sciences at Louisiana Tech and Morton is a former vice president at EMI and the producer of several feature films.

In a recent interview, I asked them how NFT's technology works, how it solves the problem of Internet video distribution, and what this kind of technology will mean for the future of video and advertising. Here are their responses in Q&A format:

How do you see the future of online video? What will things look like in a few years?

(Morton)

Explosive growth!

While we believe that download and play "on demand" type content will remain popular, concerns over content piracy will continue to limit the amount of content that is available in this format, at least legally. 

Additionally, people generally enjoy being programmed to -- the continuing popularity of radio, despite MP3 players and CDs, is clear proof of this fact.  To cut through the clutter, we go to trusted sources and depend on them to do the work of finding and presenting the content we enjoy.  Heck, that's what a DJ in a club is paid to do -- program the mood of the club. 

People also want to feel "connected" to other people and to what is happening "right now."  There is value in being able to watch an event "as it happens," and this feature is essential for some types of broadcasts, such as sports, breaking news, weather, etc.

For these reasons, we believe that the Internet is about to experience a veritable explosion in the amount of 24-7 television-style broadcasting that takes place on the Web.  Online events, such as AOL's Live 8, CBS's March Madness, and Yahoo's broadcasting of recent NASA events, prove there is pent up demand for this type of broadcasting. 

Why is video streaming such a challenge right now? What are the limiting factors? (You could speak to the CBS example if you like.)

(O'Neal)
 
The traditional approach to streaming, where each viewer is watching a separate copy of the stream with all streams being generated by the broadcaster, simply does not effectively scale to television size audiences.  Right now, online broadcasting costs scale linearly with the number of viewers (i.e., the more viewers you have, the more you have to spend on bandwidth and servers). 

(Morton)

Yes, that's right.  It all boils down to cost.

Can you imagine a network like CBS promoting a television broadcast and then limiting how many people can tune in to watch?  Of course not!   The more viewers a network gets, the more money they can make off of advertiser revenue, and since larger audiences do not cause their broadcast costs to go up, their profits increase. 

But in the online world, things are different.  Rationing access to the broadcast is exactly what CBS has been forced to do with March Madness.  Peak audience levels have been limited to just over 1/4 million viewers, and those viewers are "rotated," so after a fixed amount of time, a viewer will be bumped and forced to get back in line to gain access to the broadcast again.  According to a CBS press release, at one point there were 150,000 people waiting in line to watch the broadcast.  Think about the advertising dollars that were waiting at CBS’ doorstep and simply couldn’t come in the door.

Why is distributed computing the answer? Why is the NFT model working, while the CBS model isn't?

(O'Neal)

NFT can turn the entire online broadcasting proposition on its head, leading to a situation that is much closer to television and cable, where broadcast costs are relatively fixed, regardless of the number of viewers. 

(Morton)

I don’t think anybody can deny the enormous demand for online video content.  CBS’ broadcasting of March Madness was a significant milestone for our industry, as it vividly demonstrated the demand for online access to TV-style broadcasts.  The real question is: where do we go from here?   CBS was forced to limit access to their broadcast because the underlying technology they were using simply doesn’t scale to the level of millions of simultaneous viewers.  NFT’s technology can open the flood gates for content providers.  NFT technology solves CBS’ core problem – allowing virtually unlimited audience sizes while reducing costs.  If CBS utilizes our technology next year, no one will be talking about how many tens or hundreds of thousands of people were waiting in line to access the broadcast.  Instead, the focus will be on how broadcasters and advertisers are utilizing NFT technology to maximize exposure.

Please explain NFT's platform and how it works.

(O'Neal)

NFT is a distributed online broadcast technology.  What this means is that the computers of the individuals who are watching a broadcast help deliver that broadcast to other members of the audience.  NFT’s client software is light weight, and the application is VERY respectful of the end-user's bandwidth.  NFT only uses “idle” upstream bandwidth on the viewer's computer that would otherwise go unused. The moment an end-user needs that bandwidth the NFT application immediately “steps aside.” 

Thus, from the end-user's point of view, the fact that in addition to displaying a video feed, NFT-TV players also pass a copy of the feed on to at most, two other viewers seamlessly and invisible (except for a little icon we provide on the player to make sure end-users know the status of their player).

By transferring the cost of delivering a broadcast onto the computers and Internet connections of those individuals interested in watching that broadcast, advertiser-supported delivery of 24-7 television style content becomes practical.  To the end-user, the service appears "free" because they have already paid for the bandwidth (whether they use it or not) in their monthly cable/DSL bill. 

Additionally, by properly segmenting the distributed network and directing a viewer's computer to connect to other computers within the same ISP, NFT could minimize expensive inter-network traffic and thereby actually REDUCE the costs of the Internet Service Providers.  NFT truly provides a win-win-win situation for broadcasters, consumers and ISPs.

What does NFT provide, and where is your company heading?

(Morton)

We see NFT empowering a revolution in online broadcasting.  Our company is focused on two primary markets -- professional broadcasters (via our NFTPro product) and individual home broadcasters (via our PeopleCast product).  For professional broadcasters, we will dramatically reduce their costs, allowing them to substantially increase the amount and quality of live streaming that takes place online.  NFT will also give home broadcasters the ability to reach large online audiences for the very first time with nothing more than a PC, web cam, microphone and broadband Internet connection. 
What got you into this business?

(O'Neal)

Back in late 2000 or early 2001, I was discussing the emerging Webcam phenomenon with a friend over lunch, and the question of whether it would be technologically possible to enable a home broadcaster to reach a large audience with just a computer, microphone, Webcam and broadband Internet connection came up. 

It was immediately apparent that the only way to accomplish such a task was through some kind of distributed network -- where the broadcaster would not be required to directly feed the signal to all of the viewers.  Of course, the problem that leapt to mind was, how do you maintain such a network, as viewers, and hence repeaters, continually join and depart the network.

Being a natural "egg head," I found that I just couldn't let this problem go.  Three months later, I'd worked out the core algorithms for constructing a stable distributed broadcast network that overcame the major problem faced by such networks:  maintaining stream quality given the turn over inherent in such distributed networks. 

What made our approach so extraordinary is that our algorithms view the natural turnover in the network not as a problem to be overcome, but as the engine for driving the most reliable rebroadcast nodes into the most critical regions of the network -- greatly increasing network stability, essentially "for free."  

In fact, the algorithms are so darn nifty that that is what we decided to call the company – NFT, which we pronounce, "nifty."

(Morton)

What did it for me was that I saw that Mike's approach could lead to a way for content producers to reach large audiences in new ways -- bypassing the existing "gate keepers."

As an independent producer, this appealed to me.  My first major motion picture, "Three Strikes," was produced independently.  Though the picture was an overwhelming financial success (grossing in excess of four times its development and distribution costs), getting that picture into nationwide release was a major hassle.

Many newly formed broadcast channels face the same problem I did -- they have content and know the audience is out there, but the barriers to entry on cable and satellite broadcast systems are simply too high.  NFT provides a way for these companies to directly reach consumers in a cost effective manner.

I'm also intrigued by the concept that NFT can empower a whole new wave of end-consumer generated content.  There is a lot of talent out there.  Most everyone has a message.  Blogging has allowed people to express themselves in written words, podcasting with the spoken word, vlogs with short video clips, and now NFT will bring most anyone with the desire to do so the ability to launch their own Internet TV channel.

What does the NFT model offer for advertisers? How will advertising work in the future that you envision?

(Morton)

An innovative feature of the NFT-TV player is an unobtrusive, "one click" buy opportunity. 

People are tired of flashing banner ads that distract them from the content they are interested in viewing.  Thus, the approach we adopted with our NFT-TV player is to include an informational scroll at the bottom of player, immediately below the video window.  This scroll generally contains program title and related information.  Clicking on this scrollable area launches a Web browser and points it toward a page specific to the onscreen content.  Such a page could contain further information about the program, be a strict buy opportunity, or something in the middle like an Amazon.com page that contains interesting information about the program, such as reviews, together with a mechanism to buy a copy of the video.

We envision that in many applications, the content being broadcast will, in a sense, be an ad for itself.

Thus if you are watching, “Gone with the Wind,” the scroll at the bottom of the screen would link you to a page where you could buy a copy of the movie.  Similarly, for advertiser-supported broadcast content, while an ad is playing, the informational scroll would allow you to "one click" over to a Web page to purchase the item.

We believe that the ability to give the consumer an immediate buy opportunity will be a very powerful tool in converting ad impressions into sales for certain types of products.

Overall, the NFT player offers content providers a much broader advertising inventory than ever before at a reasonable price.   As we all know, metrics drives the advertising world.  Our player is capable of monitoring total viewership data tracking and click throughs. When developing NFT’s technology, we had the advertiser in mind because, at a lower productions cost than conventional streaming technology, any advertiser can flourish when correctly targeting relevant content.

If you could sit down with a top ad agency executive, what would you tell that person to start doing right now to get ready for the future media space?

(Marcus)

Every advertising and media buying firm is looking for new and creative ways to get their clients’ brands in front of possible buyers.  They are also looking for ways to validate and quantify their buys and budgets. NFT opens the possibilities of new ad inventory over the Internet in the form of narrow interest “streaming channels,” where audience response is trackable and data reports that can be viewed “live.”  For example, say there is a BobTV in Denver, Colo.  Bob launches his streaming channel using NFT technology and immediately attracts an average daily audience of 100 distinct viewers.  Commercials can be inserted into Bob’s broadcast a very reasonable cost…a fraction of what a network broadcast spot costs. Now, imagine hundreds and thousands of BobTV’s…Without sounding too dramatic, our technology can make it possible for very small broadcasters to profit from advertising while allowing advertisers to reach very specific audiences at low cost. 

What's the most exciting thing about the business you're in?

(Morton)

The fact that we are on the cusp of another revolution in the way people will use the Internet to communicate – personal Internet television channels – and our company has a powerful technological solution that can help bring about this revolution.

Anything else you would like to add?

(Morton)

Just that NFT is in the market for qualified investors, so if you are one and you'd like to learn more, feel free to drop us an email at [email protected].

(End of interview)

AB -- 3/30/06

Opticomm has released news about an installation of its Optiva video transmission products at the "Grande Stazione" train station in Rome.

The project involves placement of 150 plasma screens throughout the station for digital display of media, information and messaging. The use of fiber optics allows for high-resolution video display with audio and data throughout the facility.

The disappointing thing about this story is that I can't find any pictures that show the video displays in use. However, here is an image showing Opticomm's Optiva video/audio/data hardware:

AB -- 3/28/06

I was intrigued to see a press release today from PeerFactor, a French IT company, announcing a new system they are calling PeerFactor HD (for High speed Downloading), designed to give Web content providers a way to deliver large files quickly and at low cost. The system will use peer-to-peer (P2P) technology to decentralize file storage and delivery by employing the personal computers of hundreds of users across the Internet. Users will agree to allow their computers to function as file-distribution nodes in exchange for free games and music.

I found that news item intriguing in view of Robert X. Cringely's recent column, "Why P2P Is the Future of Media Distribution Even If ISPs Have Yet to Figure That Out." Cringely's article runs through some math showing (long story short) that, just to stream one iTunes-sized episode of "Desperate Housewives" to all 10 million households that normally watch the show on regular TV, all of "the OC-48 and OC-192 links used by Global Crossing, Sprint, MCI and others just might be enough," as long as you were to spread the downloads out over three days. And given the bandwidth necessary, Moore's Law is no help.

Cringely proposes PeerFactor-type P2P networks as the solution, and points to some companies operating in this space, including Network Foundation Technologies (NFT)Grid Networks and Peer Impact.

The following quotes from these company web sites give some more insight into the delivery models made possible by P2P content distribution:

"The GridNetworks PowerGrid Platform enables content owners to securely stream DVD-quality video across the Internet to broadband connected users. With this revolutionary platform, every computer and set top device becomes part of a content delivery grid, vastly improving delivery speeds, reliability and cost efficiency. The result is an 'instant on,' television-like experience, much like users have come to expect from traditional video-on-demand systems at a much lower cost and greatly improved quality."
-- Grid Networks

"The NFT Core implements a distributed broadcast network in which a viewer's computer can act not only as a receiver of a video stream, but also as a repeater - passing a copy of the stream on to one or two other viewers. In this way, NFT utilizes the uplink capacity of end-user DSL and Cable modems that would otherwise be unused. Stream integrity is assured by the NFT Core via its ability to automatically position the most capable repeater nodes in the most critical regions of the network and to reposition nodes that become unreliable to the edge of the network."
-- Network Foundation Technologies

"Wurld Media has a licensing and distribution arrangement with NBC Universal which will initially make Universal movies and NBC Universal television content available for rent to Peer Impact customers on demand. This agreement marks the first ever license of major studio content to a peer-to-peer service. Wurld also has digital distribution contracts with leading content providers, including the 'Big Four' music labels—Sony BMG Music Entertainment, Universal Music Group, Warner Music Group, and EMI—making it the first authorized peer-to-peer oriented network approved by these major content owners to distribute content. Furthermore, a relationship with Trymedia enables access to over 1,000 games and Wurld Media is in advanced negotiations for content agreements to include additional games, movies, videos, and audiobooks on the Peer Impact network."
-- Wurld Media (Owns Peer Impact)

AB -- 3/16/06

In a recent blog entry, Rich Tehrani called attention to some comments by John Giere, chief marketing officer at Lucent Technologies, about the migration to an IMS (IP multimedia subsystem)-based communications architecture.

Giere's comments are summarized near the end of an article, "Crossing the convergence chasm," about the commitment to IMS made by AT&T, BellSouth and Cingular Wireless, all of whom are working with Lucent as primary vendor. Giere's comments clicked with me, not in relation to IMS and how it works, but in terms of what IMS will make possible in delivering services to customers.

I recently wrote about the launch of a mobile video messaging service called TxtBIG, and, while I can see that the service could have interest to consumers, it's hard to imagine that this would be a service people would use every day and pay a fee for. So it seems obvious that this would have to be offered as one feature of a much larger package including mobile video, music downloads, games, ring tones and probably many other services nobody has imagined yet.

Giere's comments kind of confirm my thinking on this and show how IMS will help make multiple services available as part of a subscription-based package:

"John Giere, Lucent chief marketing officer, said that's why the transition to IMS will be gradual, not because of technology constraints, but because of cultural ones. IMS, he said, is the technology face of a larger trend: the transition from a service-model based on time to one based on subscription. As IMS blends numerous applications and features together, charging for each individual feature becomes not only a challenge for the carrier but a headache for the user to track. Giere said services will be sold as lifestyle-based models, allowing customers to access pools of related and closely linked services for a flat fee. Though IMS is not only the preferred technology to handle such a model, he said, it may be the only technology that could pull it off."

In a world of converged media based on Internet protocol, it makes less and less sense to base pricing on numbers of minutes. A flat-rate subscription seems like the logical model. This also came up in my blog entry last week about Skype's partnership with Hutchison 3. Hutchison plans to make Skype calling available over its 3G network as part of a flat-rate subscription plan.

What Giere is saying about "lifestyle-based models" makes infinitely better sense than forcing consumers to choose among a growing menu of services and then have to track all the details of usage and fees.

AB -- 2/22/06

Broadband solutions provider ARRIS informs me that they have successfully demonstrated a 100 Mb/s data service with UK consumer broadband provider ntl. An announcement today says the companies used ARRIS's FlexPath wideband channel bonding technology to demonstrate the service in lab trials.

ARRIS is in the business of providing "broadband local access networks with innovative video, high-speed data and telephony systems for the delivery of voice, video and data to the home and business." According to ntl, it is the largest cable provider in the UK and has 1.7 million broadband customers.

The FlexPath technology should allow ntl to offer fast simultaneous delivery of multiple services, including downloading of large media files, security services such as closed-circuit video, video conferencing, online gaming, and multicast HDTV, all over existing cable networks using easily-available home networking devices.

ARRIS and ntl have completed successful lab trials of the 100 Mb/s FlexPath-based service and plan to move into field trials in March 2006.

AB -- 2/10/06

I just read Robert X. Cringely's Jan. 5, 2006, column, "A Commercial Runs Through It: Google's Grand Plan to Take Over TV Through Advertising." He argues that Google is in a great position to be the company that makes it possible to deliver targeted TV advertising in the near future.

This column is part of a fascinating string of Google-related articles by Cringely analyzing Google's strategy. Previous must-read articles:

"The Sweet Spot: By Choosing Where NOT to Compete, Google Can Win the Broadband Game" -- Dec. 1, 2005

"The Google Box: Taking over the digital world four ounces at a time." -- Nov. 24, 2005

"Google-Mart: Sam Walton Taught Google More About How to Dominate the Internet Than Microsoft Ever Did" -- Nov. 17, 2005

AB -- 1/27/06

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