Posts tagged ‘Joost’
CinemaNow and Thomson’s Technicolor (NYSE: TMS) just announced a partnership to provide an end-to-end platform for online content delivery to consumers. CinemaNow will contribute its studio-licensed content and a storefront, while Technicolor will provide encoding, encryption, rights management, and content delivery services. (I hadn’t known until now that Technicolor runs its own CDN, but it does.)
The platform will extend all the way from content origination to consumer devices. The press release mentions CinemaNow partners such as Samsung, Archos, Dish Network, and HP as providing compatible hardware for the platform.
What isn’t mentioned is the engine “inside” that will make this work at the device level. I’m sure Macrovision (NASDAQ: MVSN) is in the mix, as it already has deals with CinemaNow and Samsung for its Macrovision Connected technology. Presumably Dish/Echostar set-top boxes will get the Connected treatment also, which is certified DLNA compliant.
Making it easy for anyone to become an online content retailer will lead to… well… lots of online content retailers. Most of them poorly differentiated and few with any staying power. And when the customers dry up, where will the middlemen be?
Imagine the early days of television, except with dozens of TV networks. If they had all broadcast the same programs, or nearly the same, how many of those networks would have survived? Sort of like Internet video portals today. Home video delivery will be no different.
I think to succeed as an online retailer will require one of two things:
- Exclusive content. Not really in the best interests of the content providers, who want as broad a reach as possible and who are tired of being restricted by their distribution partners.
- Something to make the channel sticky. My best guess remains either unsurpassed ease-of-use (e.g. iTunes) or most likely some form of social networking. DivX’s Stage6 had a fair amount of success here.
Those few online retailers that get the formula right will probably try to disintermediate the enablers. Or the middlemen will acquire the portals. Or both. (Me? I’m a big fan of horizontal separation.)
In the meantime, look to partnerships such as this one to facilitate the home viewing transition from discs to a full media download market.
Disclosure: I have no position in any of the stocks mentioned here.
Hey, it’s always nice to be right, even when it isn’t for exactly the reason I predicted. Lots of fodder recently, here and there, about how P2P video startup Joost is becoming increasingly irrelevant in the land of VeohHuluTube.
In addition to its P2P strategy not scaling, Joost’s software client ran slow on my machine, and apparently many folks resist having to download and install it. But going to a more mainstream web or browser-based presentation won’t save the company either. It makes them no more compelling than any of the other portals (remember that word?) angling to become video “on ramps”.
In fact, it seems to me that all of these sites–including the much lauded Hulu–are not where the money is. It’s the content, dude. Content owners now spray their wares onto any website it’ll stick to. Site owners have no leverage left, especially as the advertisements become more attached to the content and less to the site. How would ABC or CBS have ever differentiated themselves if you could have found the same shows on any channel you switched to?
Only the sites that provide something unique (social connectivity is the big one that springs to mind) have a chance. Joost seemed to have recognized that–with a built-in capability to chat with other viewers–but its technology and presentation prevented it from catching on. Now it’s probably too late.
Silicon Alley Insider has a short interview with BitTorrent CEO Doug Walker about plans to entice the media Big Boys to use BT’s peer-to-peer delivery service. Walker claims he can undercut the likes of Akamai and Limelight Networks.
P2P does a great job of file transfer. Streaming? Not so much.
Streaming via P2P doesn’t use any less bandwidth that streaming directly. It just uses somebody else’s bandwidth. So yes, it can be “cheaper”, but this is virtual savings, not real savings. Once P2P streaming delivery gets big enough–if it ever does–the ISPs will step in and demand their share. This is what the whole net neutrality thing is about. In fact it’s already happening, with Comcast selectively blocking some P2P clients. Even if there’s no direct royalty to the telcablecos, sooner or later their bandwidth gets chewed up, and then they raise prices to consumers.
This thing won’t scale. It runs up against the fundamental problems of the Internet in the U.S.: lack of edge capacity and asymmetric bandwidth.
Most internet connections are designed to be timeshared. Your advertised 2 Mb/s (or 10 Mb/s) link only gets that kind of speed if no one else in your neighborhood is using theirs. Cable systems often have a 500:1 share ratio. Even DSL is shared in a way, limited by capacity at the DSLAM in the central office (and it’s typically slower to start with). Which all works fine for web pages where it’s a quick download between idle times. But video streaming of any kind runs into real problems with enough simultaneous users, because there’s a minimum sustained rate that must be achieved to avoid jitter and/or buffering.
What makes the problem worse for P2P is that almost all internet connections are asymmetric; the upstream bandwidth is an order of magnitude slower than downstream. This is because the phone and cable companies–with their heads firmly in the sand–never envisioned the internet as anything other than a way to shove increasingly expensive media down consumer throats. That is, after all, the model they were founded on. But P2P and User Generated Content are turning that notion on its head.
So we have too little bandwidth, and it’s increasingly pointed in the wrong direction anyway.
Streaming via P2P works fine on a small scale (Joost’s beta wasn’t half bad; but notice how the more users it gets the less you hear about it?) And P2P is great for file transfer since there are no latency/buffer issues. Just don’t expect it to be the answer to video delivery for consumers. Conversations with executives at the likes of Akamai (who has their own P2P technology) have confirmed peer streaming will likely be limited to private networks where there’s greater control over the protocols and the bandwidth.
Don’t get me started on streaming vs. download, and why the latter is better because storage is cheaper than bandwidth. That’s a subject for another post.