Remember Apple’s “Hobby” product, the AppleTV? In yet another sign that its not going to stay a hobby for long, Microsoft is finally getting around to copying them: 

Microsoft Corp. and its hardware partners are trying to bridge the divide between home computers and TV sets this holiday season with the release of several “media extenders.” These TV set-top boxes will connect wirelessly to computers running the Home Premium or Ultimate flavors of Windows Vista and enable users to use their TV sets to watch movies, TV shows and Internet video that is stored on their computers.

The problem with “convergence” technologies is that while more of our media are becoming trapped on our computers, do people like grandma really want to spend the time to hook up the finicky things to their TV set? Perhaps one day when computers are as reliable as VCRs (Tivo anyone?) they will. But in an age when you can hook your iPod or even iPhone up to the TV to watch video, why spend so much effort trying to hook up a Windows computer?

Dedicated hardware always wins in the end (even if that dedicated hardware is just a software computer in disguise). 

Looks like they’re finally catching on…

Some highly anticipated Web sites are being modeled on making the experience of watching video online more like watching television. These sites rely on software that enlarges the interface so that it fills your computer screen X from edge to edge.

[...snip...]

“The early stages of video content on the Internet was a lot of user-generated stuff, stuff like my grandmother and her cat,” said Joost chief executive officer Mike Volpi. “What we’re trying to do is evolve that experience into something that the viewer doesn’t view just out of interest, but actually builds an affinity with that particular programming content.”

[...snip...]

The Internet and television are increasingly being portrayed as on a collision course, the two destined to fuse within 10-20 years when TV could become just another form of high-speed data. But those visions remain relatively far in the future. Online video is still in its infancy, Shapiro said.

What revelations!

1. People prefer high-resolution, high quality video rather than tiny, blurry, postage stamp sized videos.

2. People prefer big-budget, high-production-value content rather than home videos.

3. Computers are just as capable of playing video in a TV-like fashion.

Sounds like they took a time machine into the future! What fucking year is it again? Where are our rocketpacks?

In a major victory for open standards, and fast downloads, Adobe is now adopting the h.264 video codec into the latest version of flash:

Adobe today announced the latest version of its near ubiquitous Web video software, Adobe Flash Player 9. It’s codenamed Moviestar, because it includes H.264 standard video support V the same standard deployed in Blu-Ray and HD-DVD high definition video players. In other words, the quality of video has been substantially improved from the previous version of Flash Player 9.

You might be wondering why this is a big deal, but it means that any industry standard tool can be used to generate/play flash videos and that they will look much better and download quicker.

Now if only they could figure out how to manage the bloat that keeps flash from running efficiently…

Adweek notes (with some irony) that gaming has been far more popular than online video for quite a while:

More than one third, or 34 percent of users in the U.S. play games on the Internet at least once per week. That number bests the two most hyped online activities of the past few years, as 29 percent of users watch videos on a weekly basis and just 19 percent visit social networking sites that often, found Parks.

Casual online games are a ‘Killer App’ for advertisers online because people spend so much time playing them. The longer they play, the more ads they will see. Videos are certainly popular but the short clip lengths make it difficult to embed adverts. Ironically, the study cited time spent on social networking sites as competing against gaming but some of the most popular sections of social networking sites are the gaming areas. Just take a look at some of the most popular Facebook apps if you don’t believe us.

Perhaps then, its not surprising that MTV just announced a half-billion dollar online gaming initiative:

MTV Networks plans to invest well over $500 million in video games, seeing the red-hot entertainment category as a major pillar of growth in its goal to reach consumers wherever they spend time.

The two-year investment is part of a global strategy to incorporate games development at the inception of all new programming plans and not as an afterthought, executives say.

Some critics point out that while gaming has the edge today, growth in video watching will eclipse gaming in the future. These critics are missing out on one secret: people are not interested in a majority passive experience in front of their computers. The Internet enables interactivity and games are the ultimate form of interactive entertainment.

Video may rule the livingroom but games dominate on the computer.

Although we hate to link to a press release, we feel its safe to make an exception for this one as it contains the full text of a letter sent from Google to the FCC. In it, Google seems to hint at how it might revolutionize wireless technology in America even more than the iPhone:

In a filing with the FCC on July 9, Google urged the Commission to adopt rules for the auction that ensure that, regardless of who wins the spectrum at auction, consumers’ interests are served. Specifically, Google encouraged the FCC to require the adoption of four types of “open” platforms as part of the license conditions:

* Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;

* Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;

* Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and

* Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

Today, as a sign of Google’s commitment to promoting greater innovation and choices for consumers, CEO Eric Schmidt sent a letter to FCC Chairman Kevin Martin, stating that should the FCC adopt all four license conditions requested above, Google intends to commit a minimum of $4.6 billion to bidding in the upcoming 700 MHz auction.

Bulletpoint #2 to “utilize a handheld communications device” seems the most interesting as rumors have long swirled that Google had a skunkworks dedicated to building some sort of mobile device. Buying some spectrum would allow Google to bypass the traditional byzantine world of obsolete wireless carriers and their aged, incompatible wireless protocols. But is being cash-rich and high-tech darling Google enough to jolt the FCC out of languishing in the status quo?

Veoh has started to become popular recently since YouTube and other sites have started to implement automatic copyright filtering (and Veoh does not). But Veoh has also introduced VeohTV, their new online video application that aggregates videos from several popular sites including the traditional broadcast TV networks:

Veoh does not ask for permission to play material from other Web sites, though Mr. Shapiro says he wants to strike advertising-sharing deals with content owners to ensure that shows appear in high-quality video. But Veoh does not think that it needs consent because VeohTV is doing nothing more than playing what is already online, including any commercials shown during the programs.

The networks may disagree. By only offering video, VeohTV omits all the other advertisements on the network sites. For example, people who watched an episode of “Heroes” on NBC.com last week also saw for 40 minutes a banner ad for McDonald’s on the same page. VeohTV users watching the same episode would not see the banner.

This reminds us of a story we wrote about earlier when CBS announced their pre-approved web video syndication network. Once content is released on the internet, loss of control is an inevitability that should be embraced. It’s true that this loss of control means less advertising control (i.e. banners) but having more people see your programming is always better than having less viewers.

People are so excited by the impending death of television because finally there will be something interesting to watch unlike the “vast wasteland” that is TV:

Honda will be the sole sponsor of what Sony Pictures Television is calling the Minisode Network, which is scheduled to begin next week. Visitors to the MySpace Web site (my space.com) will be able to watch episodes of 15 vintage Sony series like “Charlie’s Angels,” “The Facts of Life,” “Fantasy Island” and “Who’s the Boss,” edited from their original lengths of 30 or 60 minutes each to an Internet-friendly 4 to 6 minutes.

Why do people hate TV?

1. Boring Content
2. Advertising

We think someone’s missing the big idea here…

Entrepreneur magazine has a profile of the startup YuMe, which helps advertisers looking to target video ads online. Of course, the new company discovered that the massive patchwork of players/competitors in the online video space created some snags:

“We’re finding that people who have the content and want to distribute it want control over the ad sales, and people who are actually distributing the content, like YouTube and other distribution agents, also think they have control or a share of the pie,” says Kadambi. For now, though, everyone seems to be working together.

“Everyone seems to be working together” sounds a bit ominous to us. It is true that much good content isn’t licensed because current business models aren’t profitable enough but that’s because there are a whole host of other infrastructure issues no one has dealt with starting with the overwhelming lack of good broadband in this country. Generating more demand for video would be trivial if the infrastructure was in place…

The WSJ covers the recent announcement by lala.com that they will stream music for free via browswers and sell albums only if you want to load songs onto your iPod:

It’s like a subscription music service, but without the monthly subscription fee. Lala is betting that in return for getting all that free access to music at home, listeners will pay to buy the songs they want to take with them on iPods and other music players. The prices will range from $6.50 to $13.50 for an album. (For now, Lala plans to sell music only by the album rather than song by song.)

Entering the online digital music sales fray is not big news. What is big news however, is that unlike all other digital music shops, Lala has reverse engineered some of Apple’s iPod technology and found a way to load their music onto iPods without having to use iTunes!

The risks include enabling Lala customers to circumvent the proprietary iTunes software. That may be viewed by Apple as a provocation. Spokespeople for Apple didn’t respond to requests for comment.

The WSJ analysis is rather rosy but we feel that with Apple’s history of frequent updates to iPod and iTunes software that its only a couple of weeks before they release an ‘update’ that completely disables Lala’s technology. Let the rat race begin!

With the rise of YouTube came the implicit conclusion that the online video format wars were over and that Flash Video (.FLV) had rendered both Apple’s QuickTime (.MOV) and Microsoft’s Windows Media (.WMV) formats to the trash heap of history. But Steve Jobs may have found a way to secretly move YouTube away from the low-resolution and low-quality Flash Video format and strike a decisive blow against Adobe:

...Youtube will be encoding all of their videos into a “H.264 streaming-efficient compression format” specifically for the Apple TV. All of Youtube’s videos are currently encoded in Flash Video (FLV) format.

While no official reason is given for the mass transcoding of Youtube’s entire catalog, Macformat.co.uk believes it has to do with the iPhone.

“As far as I know even now, Flash content per se might not play on the iPhone from day one. But Apple clearly doesn’t - indeed, shouldn’t - care, as YouTube is for many people the most critical site that uses Flash.”

Indeed, both the iPod and iPhone can play H.264 encoded video, and so it seems the entire Youtube catalog may also become available to those devices later this year.

It’s almost as if Steve Jobs took a move from Bill Gates’ Microsoft monopoly playbook, by tying the video format to the hardware devices, content providers have no choice but to adopt Apple’s video software. Although it seems interesting that the Apple “tail” managed to wag the YouTube “dog.” Who needs whom more?

Jeremy Liew has an excellent opinion piece up at NewTeeVee that points out the current dilemma with trying to make money via online video advertising:

Suppose that instead of watching a video, that user spent the same five minutes looking at regular web pages instead. Comscore says that the average time spent per page for the entire internet is about 0.7 minutes (April 2007 data). So in 5 minutes they would have seen 7 pages. Since the average webpage has multiple ad units (say 2), they might have been exposed to 14 ad impressions in those five minutes. So even if a video ad unit had a 5-10x pricing premium, the site might still have generated more revenue from regular web pages in the same amount of time because they would have served 14x more impressions.

We’ve noticed that many video sites (YouTube included) have attempted to bridge this gap by using a hybrid model of including banner advertising along with video content but that probably still doesn’t make up the gap. That leaves only two options: hoping that the premium for video advertising will grow to 20x-30x that of banners (which may take years) or grow the amount of alternative text and interactive content surrounding video.

‘Former FT reporter” Tom Foremski has an interesting musing on the shift of media power from East coast to West:

Silicon Valley is rapidly turning into Media Valley--and New York, NY should look out--the capital of the media world is shifting about 3,000 miles westwards.

Some of Silicon Valley’s largest companies are media companies: Google, Yahoo, EBay, for example are media companies--they publish pages of content and advertising around it.

Some of the most interesting and most valuable new Silicon Valley companies, such as Youtube, Facebook are based here in Northern California. So is Craigslist, the seventh largest online media company in the English language world (in terms of traffic).

Take a look at Business 2.0’s 25 startups to watch and look at how many of these mostly “social” media and advertising companies and are based in the Bay Area:18. Only two are based in New York.

But if you work in Manhattan you feel at the center of the media universe. Midtown and the Avenue of the Americas is where the capital of the media industry has sat for many decades.

We find it particularly prescient that Tom classifies several “technology” companies as media companies as soon as you realize their money is made from eyeballs. The media deals would indeed look very different if Google & Ebay were considered media firms. But ‘Old’ media isn’t so blind either, this is why they refer to Google as a “Frenemy.”

Defying conventional logic, YouTube’s traffic has only surged since the Viacom snafu (according to Hitwise data):

It’s still early in the game, to be sure, but so far it looks like YouTube can keep calling Viacom’s bluff, especially since early research shows that YouTube traffic has surged, not suffered, since Viacom demanded the takedown of 100,000 purportedly purloined video clips.

One of the big question marks left about the transition from analog entertainment mediums to the Internet is that most Hollywood guilds have deals based on TV, DVD and other established media. There is a large dark cloud looming on the horizon when it comes to how actors, writers, editors, and a host of other crew will be compensated for internet-only content.

The problems of who gets paid and when will only heat up as Internet, TV, and mobile phone content merge. Eric Kmetz, freelance writer and director, believes the Internet will develop its own standards in the next six months as problems escalate. Many in the industry are trying to cover themselves because they don’t know what direction the digital content will take, Mr. Kmetz said.

And if that’s not enough, Hollywood execs are also thinking about what happens when the webisodes become easy to pirate, a scenario reminiscent of the early days when recording labels first sold music on the web, said Phillip Swann, president of TV Predictions.com, of Dunkirk, Maryland.

Somewhere in PR heaven, another angel just got its wings. How else can you crown the success of the flack who managed to dump this puff piece on CIO magazine, titled ”Skype Founders Unveil YouTube Killer.” It’s so wrong on so many levels we don’t know where to start. Actually we do know where to start:

Firstly, if you are going to kill YouTube, you have to examine why YouTube is so popular. It runs on every browser, and every OS that supports Flash. ‘Joost’ only runs on high-end Windows PCs. But wait, there’s more:

De Wahl said Joost will replicate the complete television experience and ultimately fill a critical gap in online entertainment. “It will allow viewers to access all kinds of television over the Internet,” he said.

YouTube is also successful because it has loads of content (much of it illegal). Joost? They’ve been having some serious issues getting anything licensed. It gets even better though:

And how will it all work? Joost will use the kind of file-sharing architecture that powers Skype.

[...]

According to the London-based company, Joost will be “piracy proof” and capable of streaming video at broadcast resolutions, unlike other online-video services such as YouTube.

It’s interesting that they don’t mention that the founders of Skype were previously the founders of another famous company called Kazaa. You may have heard of it since it was a massive P2P filesharing system that was the YouTube-of-its-day. After they got their asses handed to them by irate copyright holders it seems that they’ve learned their lesson—sort of. They know now that they have to be anti-piracy but they are nuts if they think Hollywood will trust THEIR P2P network to be “piracy proof.”

Yeah, we’re the guys who created the Kazaa P2P technology but this time we promise to not let your products get stolen, no seriously.

Good luck on licensing all that content. So for those of keeping score at home:

YouTube runs everywhere, Joost only on new Windows boxes.
YouTube with tons of content, Joost with little-to-none.
Joost uses P2P technology originally used in massive file-piracy now claiming to be “piracy proof.”

Does that sound like a real YouTube killer to you?

(P.S.: on the plus side, Joost is higher quality than YouTube but its a pretty steep price they pay for improved images.)

According to a study by media analysis firm Screen Digest, Web sites such as MySpace and YouTube will earn only a fraction of the advertising budgets available for more professional online programming.

“No single user-generated [video] site has really instilled a business model yet,” said Arash Amel, Screen Digest’s senior analyst. “The business model for user-generated sites has been ‘build it and sell it and let someone else worry about the business model’.”

With the recent shakeups at Revver and Guba it seems that the “someone else” has definitely been worrying about the business model. The question then becomes, why is user-generated video so hard to monetize? Didn’t Google just pay $1.65 Billion for YouTube?

Peter Chernin, News Corp president said at a recent conference: “We do not see big advertisers advertising with YouTube or MySpace. They have concerns about the content ... and there is no scarcity value for the content ... so there is very little ability to monetise video advertising on user-generated video.”

Now it all makes sense. Who knew that advertisers wouldn’t enjoy watching people’s cats dancing on tables as much as the rest of us?

According to a WSJ email alert:

Verizon is in advanced talks with YouTube to bring the popular Web site’s videos to cellphones and television sets, in what would be a landmark link-up between telecom and Internet video.

If you thought bringing YouTube to Comcast posed a problem to your TV remote we can’t even begin to imagine navigating on your cell phone.  On the other hand, most YouTube content is perfect for the 2 inch screen on your mobile. Too bad none of us here at BBB use Verizon.

Isn’t it amazing how wireless carriers still don’t get that the open nature of the internet is what makes it so popular?

An interesting approach:

Local news video from 16 CBS-owned television stations will be available on online portal Yahoo Inc., the companies said on Monday.

Splitting the ad revenue with Yahoo may cut profits but gives local TV affiliates a way to feel that they are not being given the cold shoulder. How long will CBS use a middleman before hosting the local stations themselves? Presumably those affiliates will want to see some profits from the online ads to make up for the lost audience share.

An anonymous commenter over at TechCrunch summarizes some of our feelings about Google’s purchase of YouTube today:

seriously, is this the biggest con of all time? 1.65 biiiillion, for huge bandwidth bills, a lot of users who understand the word “free”, and a solid application that converts various video formats to flash? 1.65 billion for a flash conversion utility?

Unfortunately the commenter left out the saddest part which is the multitudes of copyright holders who held back from suing because YouTube didn’t have deep pockets. Let the games begin!

On the other hand, we should point out that the sale was paid for entirely with Google stock, so the funny money made the deal seem a lot larger than it might have been with cold hard cash.

“The Venice Project” is the super-secret startup by the founders of Kazaa and Skype which aims to really kill your television:

While the software turns your PC screen into something that looks a lot like your TV, the capabilities go far beyond anything you’ll experience in your den. Jiggle your computer mouse, and a variety of tools appear along the edges of the screen, even as the video continues to play. At the bottom of the screen, there are controls like those on a DVD player, including stop, pause, and fast-forward, as well as a search window to find new videos. An image on the left includes a menu of preset channels. And on the right, there’s a set of interactive tools that let you share video playlists with friends or family. An image at the top of the screen identifies the channel and the name of the clip you’re watching. All of the images can be expanded by clicking on them with a mouse.