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Viodi View Newsletter - February 8th, 2006

Click here to learn more about Viodi's Local Content Workshop

By Ken Pyle, ken.pyle@viodi.com, Managing Editor, Viodi View

• “I” TV – What Does the “I” in iTV Stand For?
• Does a DVR Make You Smarter ..... Universal DVR Service Fund?
• Sling Box - A Real World Review
• Local Content = Stronger Community Says Viodi Survey of Independent Telcos
• When Can We Be Content with Content?
• A Market Disruptor? Standard Def at 750 Kb/s, High Def at 3 Mb/s
• Kudos
• Krazy Ken's Korner - Valentine's Day Video - Start of a Trend

What is Advertising? The thought runs across my mind as I sit with thousands of NTCA members watching what may some day become a national holiday. Yes, as many of you may have seen, there is a group lobbying to make the day after the Super Bowl, a national holiday. It certainly has the festiveness of a holiday, as it is a truly unifying national event that cuts across religion, race, age and gender.

Back in the dark ages before the hundreds of channel choices provided by cable television and satellite, we all live under a regime of limited channel choice. The upshot was that we shared common experiences, which is becoming increasingly rare in our fragmented, on-demand, place-shifting society. Advertisers had it easy, as they pretty much knew where the eyeballs were, even if they did not have an accurate count of how many there were.

Fast-forward to today and the Super Bowl. What exactly is the content I am watching? Is it the football game or the commercials? The commercials are definitely appealing and have drawn a non-football crowd to make this event bigger than anything in American sports and maybe even international sports. In fact, the only time I am typing is in between plays as I don’t want to miss the commercials or the game.

The point, which has been made much more eloquently by smarter people than this author, is that advertisers increasingly need to provide messages that are relevant and engaging to their prospective customers; in other words they need to provide good content. Allison Dollar and Ben Mendelson of the Interactive Television Alliance, who are two of these smart people, led a couple of good panels at NATPE regarding the direction of advertising and promotion and all the answers are probably included in my unreadable notes from their interactive panels.

Another feature of the Super Bowl is that it is a great venue for the cross-promotion of products, as evidenced by the heavy rotation of advertisements for Disney products, including offerings from ABC, ESPN Mobile and Disneyland. The more interesting thing is the heavy promotion of the NFL Network on a network owned by ABC.

Talk about over the top, the NFL is effectively bypassing the traditional networks with their NFL Network offering. The NFL provides a good example of how content owners increasingly want to have more customer touch points, as well as more direct relationships with their customers. It wouldn’t be surprising to see the NFL Network reserving some sort of rights for the Super Bowl, whereby one would need to watch the NFL network to access special interactive features.

“I” TV – What Does the “I” in iTV Stand For?

As Entone’s (a Viodi View sponsor) Steve MacKay and others have pointed out in various conferences, the on-demand world we are moving towards is really about personal television. The question is how personal can interactivity be when you there is more than one person in a room. Remote control wars are bad enough when the only parameter is channel changing, but what happens when a multitude of other parameters, such as text messaging, interactive statistics and multiple camera angles, are added to the mix?

These were some of the topics that were discussed in an NTCA panel called IPTV – Evolution or Revolution. The multiple camera angles were mentioned as something that is technically possible with IPTV. In fact, it is also possible to enable multiple camera angles in Hybrid Fiber Coax systems. Technology is the secondary challenge as compared to the business model and the licensing. It is not hard to imagine the NFL Network someday reserving a multi-camera view of the Super Bowl (or any other game) as an exclusive for their channel and charging for it as a Pay Per View event.

Does a DVR Make You Smarter and, if so, Should There Be an Universal DVR Service Fund?

Digital Video Recorders are an example of personal television that is getting closer to crossing the chasm that separates early adopters from the early majority. DVRs do cause people to cross a chasm of viewing experience for which there is no return. Knowing this, I personally have vowed to be a late adopter. I have heard many personal testimonies for how life-changing these devices are, but Jimmy Schaeffler of the Carmel Group is the first person that I have known who suggest that his TIVO makes him smarter.

The more provocative question he poses is whether society should create mechanisms to ensure that everyone has access to the benefits provided by DVRs; a sort of universal service fund for DVRs. In other words, are we on the verge of a DVR digital divide?

Click here to read this must-read article titled,

TiVo Makes Me (And My Family) Smarter

Add a Sling Box - A Real World Review

Once one has bridged the time-shift canyon with a DVR, then the next thing he needs is the ability to place-shift. SlingBox is a nifty little device that allows people to use the Internet to "place-shift" programming. With their recent funding round of $46 Million it seems like they have a rosy future. In this issue, we take a real world look at a product that may just disrupt the "over the top" video dreams of folks like Apple, Google, CBS and the rest of the media conglomerates. Tac Berry, a long time industry executive and consultant, gives a real world and sometimes humorous review of a product that has been getting a lot of buzz at Telecom tradeshows this past month. Click here to read more....

Local Content = Stronger Community Says Viodi Survey of Independent Telcos

Big events, like the Super Bowl are a great way to provide people with a shared experience. Shared experiences are the thread that binds a community. The survey that Viodi just completed showed that the main reason independent telcos provide local content is to help their community. Over 53% of the respondents are providing local content today and over 80% will be providing local content within the next 24 months. To learn more about the results of this survey and the cool things these operators are doing, you will have to meet me at the Content Pavilion at TelecomNEXT.

When Can We Be Content with Content?

Life would be so easy for an operator if they could just go back to the old days when customers supplied the content. It has been a challenge for operators to get content for their IPTV networks. Clearly, progress is being made, as most of the networks are starting to provide rights for IPTV delivery as Mark Ellison of NRTC pointed out in his talk at the NTCA Annual Meeting. He did a good job of discussing some of the business reasons why networks have been slow to provide rights, but used NRTC's successes as proof-points that the content owners are coming around to IPTV, given certain criteria are met.

Auroras has also been progressing with their plans to offer a satellite headend transport and programming solution as evidenced by a couple of interesting announcements in January including a demonstration of their satellite headend transport solution. The more interesting development was the announcement of an equity investment from 3 Rivers Telephone Cooperative, a large Montana communications concern that also looks to be an Auroras’ customer, as well as investor.

These alternatives will be necessary, since NCTC continues with their moratorium on new members. According to Dan Mulvenon of NCTC, “NCTC is in the process of evaluating all membership policies and the moratorium will remain in effect during that review; there is no specific timeframe as to when that will be completed.” Ah, I guess we will never be able to content with content.

A Market Disruptor? Standard Def at 750 Kb/s, High Def at 3 Mb/s

Infinite Video made its market debut at NTCA with an announcement that threatens to disrupt the emerging status quo of MPEG-4. In a nutshell, they are offering a complete IPTV system, from middleware to encoding to set-top to billing interfaces. The disruptive part of their announcement is they are claiming that they require only 750 kb/s peak to encode standard definition and 3.0 Mb/s peak to encode high definition video. Their compression technology partner Even Technologies has apparently received approvals from major content owners for their encoding algorithms.

The logos on their brochure indicate that they are backed by some technology heavyweights, including Intel, Philips and IBM, along with names familiar to the independent telcos, including ETI Software and Kasenna. The value proposition to their solution is that a telco does not have to rebuild their entire outside plant infrastructure to begin providing a competitive video service offering. Although, this debuted at a tradeshow with a focus on independent telcos, this solution could be of even bigger benefit to the larger telcos, which face major plant upgrades in their quest to offer video to their subscribers.

Kudos:

I ran into Bob Mueller of Mid-State Consultants in the hall at the NTCA Annual Meeting and he briefed me on this year’s Bobcomm, a show that I wanted to attend (did I mention that I recently counted 85 state and national tradeshows and meetings – I am sure that’s not all of them). Bob said 437 people from 63 telcos and 90 vendors attended this multi-day event in Provo. What launched in a basement in a Denny’s café 8 years ago with four telcos, two vendors and 17 people has turned into a great learning and networking experience for all involved.

Bob also mentioned that Mike Riley has been promoted to VP of Engineering of Mid-States Consultants. A well deserved promotion for Mike who has always been on top of everything going on with regards to video in the world of independent telcos.

Congratulations to Kevin McGuire as he leaves his Director of Business Development position at Hancock Telecom to become the new Vice President of Business & Technology at NTCA. Kevin had done some clever market development work at Hancock, especially with regards to Hancock’s pioneering use of the ever popular Garfield brand to help build and position Hancock for an ever competitive future.

Lastly, NTCA did a good job of summarizing the issues small operators face in trying to compete in the video world. It is very succinct and understandable. Click here to view.

Krazy Ken’s Korner - Valentine's Day Video - Start of a Trend?

Last Sunday morning I decided to check out the inter-denominational Church service that NTCA had organized for the attendees. Appropriately, a central part of the pastor’s sermon was on love and it made me realize that Valentine’s Day has once again snuck up on me. The sermon was more than timely, as it was informative since it gave me a great idea for a present for my valentine.

The present I am thinking of definitely won’t be jewelry. Ray Pearson of Jewelry Television explained in a panel on Sunday afternoon that the margins on jewelry are ridiculously high. These margins allow Jewelry Television to pay cable operators to carry their service. In essence, Jewelry Television sets up cable or telcos as an electronic storefront for high-end jewelry. It must be working, as, with almost $400 million in sales, they are the 21st largest retailer of jewelry in the U.S.

On Monday, my morning was consumed by meetings, phone calls and emails, so I missed the opening sessions. Trusted sources tell me that the sessions were quite good. One thing that impressed several individuals was the vision painted by renowned global futurist, social scientist and author, James Canton, Ph.D. One of the tidbits relayed to me regarding Canton’s speech, is that he suggested that text messaging will soon be replaced by video messaging.

Rewind to a year ago and, as many may recall, last year Valentine’s Day fell smack in the middle of the NTCA Annual Meeting. Of course I was so wrapped in preparing for my travels, I forgot about Valentine’s Day until Valentine’s Day. Fortunately, I had my trusty video camera and access to a high speed Internet connection. With about 45 minutes of writer’s block, several takes and some post-production tinkering, I had composed and transmitted a video message to my loved ones.

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Sunday, October 23rd

• On Demand Success Stories
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Monday, October 24th

• Standardize This! Can’t we work it out?
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• Look Ma, No Headend

Tuesday, October 25th

• Next Generation Peer to Peer – Where do Telco’s fit?
  
• High Definition – A Must Have or a Must-Carry?

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• Content Differentiation – What’s an operator to do?

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