Recognizing Video, Realizing Opportunity

February 19, 2007

Mark Stirling (serial entrepreneur and all around good guy) pointed me to a New York Times article discussing the state of digital video fingerprinting – the practice of identifying copyright videos.

It focuses on Audible Magic but also discusses other companies vying to fill the need of content owners to identify and stop unlicensed online video, including Guba with their Johnny product.

Digital video filtering and recognition is considered by many to be the holy grail of 2007, and many start-ups are focused on getting it right.  As the article suggests, it’s by no means trivial and whoever has a launch-ready solution will have an easy time getting the attention of the big guys; keeping it depends on the quality of the solution.

The article also contains a couple of lessons for entrepreneurs:

1. Don’t be afraid to switch direction when it makes sense

Audible Magic started with the goal on audio recognition. They changed direction after realizing the opportunity in video and also being able to execute on the opportunity.

2. Look to innovate of the innovation

Everyone wants to be the digital video recognition company and most are focused on presenting their solution to online video properties.  I like Attributor‘s approach of scouring the web and finding copywritten video.  It adds something more than the others. If they get the digital recognition portion right then it sounds like a great venture. They’ve already raised a Series B round bringing their total funds raised to $10M, and have the management pedigree – the company was founded by Jim Brock (former SVP of Yahoo), and Jim Pitkow (former CEO of Moreover). Definitely a company to watch.

2006 was a banner year for online video. It’s going to be interesting to see what happens now that the honeymoon phase is over.  With the recent troubles at YouTube, 2007 is off to an interesting start!

Internet and Interactive TV: Know Your History

February 16, 2007

It seems that everyday a new company pops up claiming that it will revolutionize television, and a common theme is interactivity. But is interactive t.v. really the future?  For starters, interactive t.v. isn’t new.  It was a concept thought up by people back in the early 90s, most notably Jim Clark (Silicon Graphics, Netscape, Healtheon(WebMD) founder…grand daddy of the internet).

 Here’s an excerpt from an Oct 1994 Wired article where Mr. Clark is interviewed. Remember, this is 1994 – before web browsing, e-commerce, or anything we now take for granted. Amazing reading this today!  (there was concern the internet would be used for commerce!)…

A quesition on why he likes Mosaic (resulting in Netscape; bringing the internet to life)…

Mainly because I ran into Marc Andreessen immediately upon leaving SGI, and Marc was the author of Mosaic. The original thought was to go into interactive television in some fashion. But what is Mosaic? A navigator for interactive stuff on a network. The network happens to be called the Internet, but the physical network is slowly improving in bandwidth and someday it will be capable of carrying video. The slope of growth of the television industry is zero. It’s even negative. Television doesn’t change. Cable is nothing but an overlay of a physical delivery scheme for broadcast television that has been around for 40 years. There’s no two-way interactivity, nothing. So I began to think about the difficulties of the transition of the cable industry into interactivity. It’s a completely daunting task. First of all, you have to cause the television industry to get accustomed to digital technology, which is a major change. Then it has to think of two-way interactivity, which is a major change. And it has to make the physical network carry switched-video capability. That’s just a whole group of major changes.

That’s not even talking about the consumer.

Right. People don’t have problems with interactivity on computers. More and more, computers are being built so you can see video on them. You look at those dynamics, and you look at the dynamics on the other side of the ledger, and you say, What are you doing over here? Get over there.

I’m sure you’ve followed all the concern about the coming commercialization for the Internet.

That to me is peculiar. When the phone system was invented it was primarily for voice. We commercialized it when we began to use it for business, and we commercialized it further when we began to do data transfers over the wire, money transfers over telephone lines. It’s exactly the same thing. Commercialization of the Internet is as inevitable as the sun coming up tomorrow.

To read the full article go here. It’s truly amazing to look back on what once was. I agree with the idea that interactive t.v. depends on the network accepting responses.  We’re still not there today, and I don’t think it’s in the near future. Can the cost of enabling upstream communication on a network really be covered by interactive t.v. shopping? Don’t think so.

There’s a lesson in this for existing interactive t.v. players and start-ups or companies looking at entering the space – if you don’t know where you’ve been, you have no idea where you’re going. Silicon Graphics burned through a billion dollars before realizing that interactive t.v. might be cool but was missing two keys to success: market demand and a viable business model. That was back in the early 90s but do these keys exist today?

A MUST READ for anyone that wants to look back at the beginnings of the internet and Jim Clark is The New New Thing by Micheal Lewis.  You can get it cheap through Amazon. Bill Gates and Steve Jobs might get all the press (well deserved), but Jim Clark was right there and a visionary behind much of what we enjoy today. Thanks Jim.

The Power of P2P – A revolutionary opportunity for operators!

February 8, 2007

There is no denying that P2P (peer-to-peer) content distribution is massively popular with consumers, and disruptive to operators, content owners, etc.  The guys behind Kazaa made their bones in the internet game using P2P, then launched Skype, and now are focused on video with their coming service Joost. Network operators should take notice. 

Like I’ve always said, consumers are in control and they will get what they want no matter what you try to do to stop them.  P2P is great because it is a democracy – you get what you want, and pay less for it (if at all).  But it’s also an efficient and cost-effective distribution mechanism – way more cost effective than point to point distribution.  Instead of fighting it, operators can embrace P2P.

Computers aren’t what they used to be, adding the storage capacity of PVRs, people can have a terabyte of data sitting in their homes these days, and a fast broadband connection connected.  Those are the two enablers of P2P, storage and bandwidth.  Collectively, soon the storage in people’s homes could exceed that of the operator! The idea here is for operators to embrace P2P (BiTorrent, etc.) and incent customers to become content distributors!

An operator could…

1.      Recognize the number of people on a node in the network

2.      Provide an incentive for consumers to ‘sign up’ to be content distributors, and build the content their content distribution army!

3.      No when they get an on-demand movie order they can direct the consumer to any of the content distributors on the node

4.      The consumer picks the node with the best speed/price/etc. to deliver the content to them!

Basically, the operator still owns the rights, lowered the cost of distribution, and created an open marketplace for consumers to make money while providing a great, consumer-centric service!

Just one more way that ‘old media’ can take advantage of the greatness of the new digital world!