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Viodi View Newsletter - November 15th, 2006

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

Overview

The sessions at Digital Hollywood tend to repeat themselves. Going to the show a few times a year and all of the sessions start to blend together. Still, there are jewels that can be uncovered by going to the sessions.

One of the significant things was the speakers who were not there – Apple was not represented on any of the panels. Google also did not have a major presence at this show. The presence of Bit Torrent and their dealings with the studios indicates that the studios are taking Peer to Peer seriously. Here are some more tidbits.

Some Key Take-Aways:

• In Europe, 40% of mobile content is viewed in the home. If behavior in the United States is similar, then this could imply creating an in-home, “Sling Box” type product could be very important for independent telcos.
• If the talent is a producer, then you don’t have to pay SAG. SAG (Screen Actor’s Guild) has not been an issue for independent telcos producing local content, but this could potentially be a challenge if a scripted show become a hit for an independent telco. If the talent is the producer of the show, then apparently SAG rules do not apply.

Content Issue is Over

So said Lisa Crane Greer, CEO of Media Venture Advisors. She meant this in the context of being able to acquire movies for on-demand ventures. Relative to five or six years ago, this is a relatively true statement.

Homezone Product to Launch Akimbo Service on December 15th.

So says Josh Goldman, CEO of Akimbo. He also says Akimbo will be distributed on Cisco (i.e. Linksys) products soon. Movielink is also working with Homezone and Akimbo and is doing lots of co-branding with ISPs.

Peer to Peer Going Mainstream

The fact that Bit Torrent, the peer to peer company, had a representative talking about how studios are talking to them about using P2P as a content distribution method speaks volumes as to the legitimacy of this approach.

From Online to Retail

Brian Taptich of Bit Torrent – he is the guy dealing with content owners – suggested that
The distinction between high quality studio content and viral video will increasingly become blurred. What will become more important is viral video. He also suggested that the pay model for online video will really take off when the major retailers, such as Walmart and Best Buy start to offer videos online in a big way.

Josh Goldman of Akimbo suggested that it is in the studios’ best interest to make sure they create strong online alternatives so that Bentonville, Arkansas and Minneapolis, Minnesota (Walmart and Target) doesn’t control this distribrution channel the way they do retail; [Ken’s comment - and these retail channels do serve as a gatekeeper for even the almighty content companies.]

Josh went on to day that Amazon is a good model for any entity selling content online. He suggested that they are not the low price leader and, instead, people buy for convenience and the trust they have for Amazon and the expected and actual experience. Goldman think the margin in this business will be built from the niche – the so-called long-tail - content.

Who Buys Online Video Content

Goldman said Akimbo’s audience is “barbell shaped”. They appeal to both technophobics as well as early adopters. Bruce Eisen of Cineman now said their audience tends to be early adopters, who are male, over 35, with higher incomes and education. The MovieBeam audience is also early adopters of High Definition between 25 to 54 and it skews towards women. The Bit Torrent crowd is male teenagers and males in their early 30s. He suggests the two groups are very different. The younger generation don’t own televisions, as they consume their media on other devices.

Online advertising is becoming huge.

This panel at Digital Hollywood explored how video is becoming a major part of this equation.

- $25 to $60 CPM (costs per thousand impressions) is the typical rate that is being paid for rich media/video advertisements. Advertisers like video because it is non-cluttered.
- Heavy.Com’s Mark Spates suggested that people like great creative. People don’t like pre-rolls because they can’t control them.

Mark Larkin Executive Producer, CNET Broadband and Webcasting d oesn’t think that 30 second pre-roll works too well. Thinks pre-roll will evolve to

• shorter
• more relevant and interactive

Have to go to User Generated tagging in order to optimize for searching.

What MyHeavy has found is that people like to go to multiple sites. Give kids something for doing something. This can be something like a "Points" program or an "Instant Win" program.

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The Video Business Case for Independent Telcos – The Report

Viodi’s report, Video Business Case provides results to a survey of independent telcos and their business case for video. Most of the telcos that responded to the survey have figured out a way to deploy video services. This survey provides insight from the independent telcos as well as several of their Engineering firms.