DAM Acquisitions Continue: The FeedRoom, Nunet Acquired by KIT Digital

The Digital Asset Management Acquisitions continue to occur.

In a move that appears to be both a technology and customer rollup, KIT Digital a publicly traded company on NASDAQ (Symbol: KITD) acquired The FeedRoom for $9.8M and Nunet (from IMG Worldwide) for $11.1M totaling around $20M. KIT Digital provides end-to-end video IP technology and services, and with these acquisitions expands that capabilities with broader video and business oriented DAM offerings. The purchase of The FeedRoom is essentially equivalent to thier last round of funding. As part of the transaction, The FeedRoom's controlling shareholders -- NewSpring Ventures, BEV Capital and Velocity Equity Partners -- invested $4.0 million in KIT digital common shares, at a price of $11 per share, through the conversion of The FeedRoom Series F Preferred Shares purchased at closing.

The FeedRoom, a provider of Video and traditional digital asset management (DAM) solutions had acquired ClearStory Systems in December of 2008. At the time ClearStory's customers included Bristol-Meyers Squibb, National Geographic, and several others. I suspect that there would be concern from these large customers about the stability of their DAM vendor.

I'm not as familiar with Nunet, but if it's what I believe it to be, it is video asset packaging and distribution technology that was developed many years ago at IMG Worldwide to support many of their clients with establishing their brands and creating appealing web sites that utilized video. This would mark an exit for IMG Worldwide from the DAM space -- which always seemed to me as a sideline business.

Give up sex or your cell phone? 1 in 3 would give up sex!

A survey done by Kelton Research for Samsung Mobile in several US cities shows that on average 30% of men and women would put their sex lives on hold for a year, rather than give up their cell phones for the same period. Overall, a greater percentage of women than men were willing to give up sex for a year than their phone.

The choice -- communication or sex -- was put to 300 people in several major cities. The results for some of these cities are below, drawn from different media reports.

In Denver 33 percent of women would put their sex lives on hold for a year to be able to use a mobile device. Only 20 percent of men would choose a cell phone over a steamy night.

In Boston, 31 percent of men and women would give up sex for a year rather than forfeit their telephones for the same amount of time, according to a study released this morning. When it came to the battles of sexes, 38 percent of Boston women were more willing than men to lose their libidos versus missing their mobile phones. Only 19 percent of men said they would be celibate.

A survey of D.C.-area residents by Samsung Mobile found that 27 percent of men and women would rather forgo sex for an entire year than give up their cell phones for the same amount of time. Women, 38 percent, were more willing than men, 9 percent, to give up sex to keep the phone, Samsung says.

In Chicago, women (36 percent) were more willing than men (15 percent) to lose their libidos versus missing their mobile phones.

Which would you choose? ... and Why?

Posting from the Sky! AA's Gogo Inflight Wireless

I'm posting this from the Sky! I'm on an AA flight returning from Detroit offering it's new Gogo Inflight Internet. It's complimentary but would be offered for $9.95 per flight -- a little pricey for a short flight, but probably worthwhile for a coast to coast US flight. I don't know it's offered overseas. For a business traveler (when they return to the air) this could be money well spent.

It's impressive. The speed is pretty good -- it's fast enough to watch a Yahoo! or ESPN video (my test cases), though the playback speed sometimes exceeds the buffer speed, making videos stop and go. Page loads are fast. I'm finding that occasionally, some page loads are incomplete, and emails containing embedded images load slowly or incompletely when asked to update the images (Thunderbird email option). However overall, for browsing web sites and doing email it's a very good experience.

Gogo strongly suggests a proper browsing netiquette: that users browse "appropriate" sites, and that you don't visit sites or do things that could "shock your neighbor" in the next seat. They also don't allow video phone conversations -- though I'm not sure how they police that.

The availability of in-flight internet access removes one of the last barriers to being connected all the time from anywhere... well that and a few dead cell spots in some of the canyons near Golden, Colorado and on route 3A near Winchester and Tewksbury Mass.

Yawning Explained: A cooling mechanism for the brain!

OK, so this post isn't technology or digital media related... but if we think of the human body as a pretty darn cool machine, then perhaps it fits. In any event, it appeals to my inquiring mind -- wondering for years, why people yawn.

Now researchers at Binghamton University believe that the primary purpose of yawning is to control brain temperature. Apparently our brains operate more efficiently when cool, and that yawning is a physical adaptation that has evolved to provide maximum cooling of the brain.

Apparently they studied Australian parakeets (so much for being called a "bird brain") because they have relatively large brains, live wild in Australia, which is subject to frequent temperature swings, and, most importantly, do not engage in "contagious yawning", as humans and some other animals do. Contagious yawning is thought to be an evolved mechanism for keeping groups alert so they "remain vigilant against danger", according to the researchers. Makes sense to me. It also explains why people yawn when transitioning from sleep to a waking state, and how yawning doesn't occur and in fact can be counter productive in certain circumstances.

The article concludes stating that this new study on yawning changes the popular notion that yawns are mere signs of boredom. On the contrary, a commentator on the study states that "yawning more accurately reflects a mechanism that maintains attention, and therefore should be looked at as a compliment!"

I wonder if it also works to cool off "hot heads"?!

The full article can be found here.

News Corp. to blaze pay-to-read trail... will other Newspapers follow?

Rupert Murdoch's News Corp. plans to charge fees for its newspaper Web sites. While it is an about-face for Murdoch, who at one point wanted to make his Wall Street Journal on-line a free site, it is a very interesting development, and could lead the industry out of the misery it's been suffering for quite a while.

Newspapers have both toyed with and opposed this approach, concerned that it would turn away readers to other free news sites, or in some cases, arguing that the value of the content continued to be high enough to support enough traffic to maintain it as an ad-driven site. Some companies, like The New York Times has at times charged for past articles, but never for on-line daily access to "All the News that's fit to print!"

The same challenge holds true for News Corp, who owns The New York Post, The Times of London, and the British tabloid The Sun. The company has some experience with this -- the Wall Street Journal Online is one of the most longstanding, successful paid sites around. However, the WSJ serves an affluent and business focused customer base, and an industry where money is freely paid for the best information. Will the same hold true for The Sun? Will the working-class, everyday Brittish reader of The Sun, pay a few quid for the on-line version? The jury is out.

My thought is that it comes down to access and value. Murdoch believes that others will watch and follow suit. If people can't access what they love or are habitually used to for free, and can't get it elsewhere, they will ultimately pay to continue the loyalty rather than give up their habit. So I believe this can work, but pricing will continue to be key. The case can be made that people were willing to pay for it before, and all that has changed (more or less) is the delivery means -- web vs. print. Why should information from a good, well researched or trusted source (even if it is a tabloid) be free? Everything costs something to produce, and the consumer will always be the judge of its cost -- they will vote their loyalty and need, with their wallets.

This could be a way out of the woods for newspapers and potentially magazines. It depends largely on the industry cooperation (dare I say collusion?) to really make this transition successful. The more willingness and "cooperation" among sites to charge, the more the consumer gets the message in concert that a change is afoot and it's not just one maverick News corporation. This transition could take some time as some papers sit on the sidelines and watch (as they've done for much too long)...but it also could happen very quickly. Newspapers need some rapid changes to address revenue. They've done business as usual for too long and many are paying or have already paid dearly for it. This is a relatively and potentially technically easier transition, as most already have web sites and web teams.

Yes, they'll likely get the business model or subscription price or approach wrong here and there, and there will be some pain in the transition. But it will be less painful than what they've been going through because many have been unwilling to experiment with Web subscriptions and other models, and now they're paying for that lack of "R&D". If many move en-masse, with more companies trying out various models, there will be a more rapid coalescence around successful models, and a quicker transition for the industry. So there are lots of good reasons to move together than to wait. One might even ask, "What have they got to lose?"

Some high value, free content sites may benefit from increased traffic that could come at the loss of traffic to others. It could also affect aggregators like Yahoo!, MSN and others, who won't have access to the better content anymore, but they will still serve as referral sites for the papers (as they are for the WSJ where much of their presented content on Yahoo! is actually a teaser, with the core of it still within the walled WSJ garden).

This is a development worth watching... or reading about. The question is whether we'll have to pay to read the details from our favorite sites.

Sony poised to drop price on new ebook reader; pressure Kindle

Sony is poised to dropped its prices on its new Sony ebook reader to $199 according to the article on Yahoo Finance. This will certainly spur more sales of ebook readers, breaking the first psychological price barrier (under $200). I think, however that $99 is the key psychological level... Whoever gets there first could dominate the market ... perhaps in time for Christmas!

With songs and content distributed with DRM there were 3 factors: price, ease of use, and security. Initial DRM implementations were fat, slow and overly secure. Apple won this game when it went for a ligher version of digital rights which was secure but easy to use (and also was relatively quickly broken by hackers...no matter), priced songs at $0.99 and provided easy access to them, and with a relatively inexpensive device. I think ebooks could follow the same pattern. Here the 3 factors are: price, ease of use, and distribution.

The availability of ebook readers is obviously critical which is why I believe the $99 barrier is key. At that price, I believe consumers will be much more willing to try it out. Secondly, there's got to be enough interesting content to buy on it. Here's the opportunity for publishers of all kinds. Yes, it's a little serving of which comes first the chicken or the egg, but it's time to begin to see that the devices are coming and the market will follow, so start getting your content ready now. Most eBooks are around $10. I'm not convinced this is the right or even final price. In fact, I think it's a starting point. Part of it is a carry over of paper-based publishing pricing to the digital world, just as we saw with digital music -- publishers trying to get as high a price as possible (if I recall correctly originally some music publishers started at $4.99 or $3.99 per song). I think we'll ultimately see lower, tiered pricing, but that could be a while, just as it was for music.

Sony's support of the open ePub standard format potentially gives it an initial advantage, as more people can more easily publish to it. From a publisher's perspective format won't matter as much as distribution -- the broader the better. Initially, publishers will likely choose whichever format and on-line or other 'venues' give it both the lowest production cost and the best distribution. Once production costs are reduced, by more automated production processes (and the technology for that is just emerging now), distribution will reign alone.

Like the initial iPods, these devices have to be connected to a computer. Wireless access should be part of the devices, which will stimulate more sales and opportunities for serial and episodic works, and enable impulse buying.

Ultimately, a key ingredient in the success of these devices will be which ever gives the reader (the human, not the device) the best experience of reading. I think there's still lots of room for experimentation here -- on both the device side, and on the content side. Yes, it should be easy on the eyes and easy to read, navigate etc. but it could also do more in terms of layout and images. There's room for growth there in both the devices and the ebook format standards.

This is a positive development in the market for both the consumers and the publishers. Now let's see how Amazon and the Kindle responds.

References:
NY Times article here: http://www.nytimes.com/2009/08/05/technology/personaltech/05sony.html

The Financial Value of Social Networking -- is it the Emporer's New Clothes, again?

When I told people I was writing a blog, several said to me: "You have to write about social networking!" OK, I will. Here's my current view...

I've long appreciated the power of the social network. I was first introduced to it about 30 years ago by my uncle, who asked me, "How far do you think you are from contacting anyone in the world?" What a great question! It was his version of concept of "6 degrees of separation". He was fascinated by the natural chain of relationships. Over the years he kept in touch with so many people, and naturally his network turned out to be very large, influential, and global. I learned that through him I was one person away from the Minister of Education in China, thus two away from the Chinese Premier, and at one point, one person away from then President Reagan.

In the early 90s to pass the time while traveling on a business trip, a colleague and I would try to derive arbitrary chains of movie actors, by finding common films in which they appeared with other actors. Not soon afterward, much to our amusement, the Internet Movie Data Base or "IMDB" as it's known, emerged and the Six Degrees of Kevin Bacon game began (a trivia game based on the assumption that any actor can be linked through his or her film roles to actor Kevin Bacon within six connections). It now survives as the "Oracle of Bacon".

Since then Social Networking has been more formally defined and elaborated on. It's taken a number of forms -- from the business oriented "LinkedIn"

Recently I've found my wonder has increased -- I wonder if social networking sites are financially viable independent businesses? For many of these I find myself asking "Where's the beef?" (to quote a very old McDonald's commercial). There's currently a lot of excitement, hype and hyperbole about Social Networking, and for many of these sites (e.g., LinkedIn, Facebook, Twitter, Ning). I'd qualify much of the industry as going through the "Hype Phase" of the Gartner market evolution curve. That happens before it peaks, then the valley of dispair occurs, then the real growth and viable use of a technology occurs.

The power of social networking is obvious to me. To obscurely summarize and quote the sci-fi book Dune: "the Worm is the Spice the Spice is the Worm" that is, "the Network IS the power, the power is the network". Any social network has an intrinsic power and value for all its participants. It is inherent in the sharing of common interests, values, information or ideas that each individual network provides to participants, the feeling of belonging, and the relationships that exist or get freshly established.

However, I wonder about the the financial value of the social network. How does someone take this living, vital "thing", this community, and make money with/from it? Every investor in social networks believes there is money to be made there... somehow... But thus far few have really demonstrated it -- in terms of profitable and sustainable businesses.

Then this morning I came across Jim Goldman's timely "Social Networking's 'Naked' Truth" article on CNBC. He nailed my concerns almost exactly. He writes:
"Are we staring another dot com boom/bust right in the face? When it comes to social networking, that very well might be the case since it appears this emperor has no clothes.
...
Look, I don't argue the power of social networking sites. Facebook is addictive, even magical to millions. Same goes with MySpace, and Twitter, and LinkedIn, and Digg, Badoo, Classmates, Bebo, Flixster, Friendster, Orkut, and hundreds of others. They are powerful, fun, convenient. They offer value. And they build connection. Look no further than the Michael Jackson news tsunami to see how social networking affects our lives and drives information.

But with hundreds, even thousands of these sites out there already, with many attracting millions in venture capital, I simply ask, Where's the return on the investment? What's the business model to MAKE money and not merely to attract investment?

These sites generate enormous news coverage but next to nothing in profits. Somehow, we're descending into a kind of Back to the Future scenario where eyeballs and headlines become flimsy substitutes for business models and profit streams.

I don't know, but it seems like hype is eclipsing hope when it comes to social networking. We've seen this all before. And paid a dear price for the busting bubble. The valuations being bandied about for these sites defy reason. Social networking might be cool, but where's the beef?"

This summarized very clearly and succinctly most of my concerns, and I found myself in substantial agreement. There will be a lot of fall out from all of these social networking sites. As with any new technology market segment, a lot of money will have been invested, and far fewer than one in ten will be successful that is, sustainable on their own. I do believe that a few will find a way to dominate some segment of the market as has been the case with other prior internet-centric businesses (e.g., Amazon, eBay).

The valuations are mind boggling -- especially for those sites which have little or no revenue to show for the massive investment. It's very clear that what social networking sites do is make visible and tangible the "power of the network" -- the common interests, and chains of relationships between people. Outside of the Internet, these are invisible webs of people that span geography and time, and provide real power and real value. Thus the Web versions of them, make them visible, tangible, and thus accessible, perhaps moreso than when they were invisible. That has value. But whether that power and that intrinsic value can be tapped and turned into "real money" has yet to be fully determined.

Thus far, very few seem to know how to extract financial value out of these social network sites (as Jim points out with MySpace, for example). People know how to invest in them, and make a buck by selling them to someone else who will continue to invest. But like selling baseball cards to each other -- it's only worth what someone will pay for the printed player -- but in earnest has little value more than the cardboard it's printed on. Only a few have really demonstrated how to generate money from the site, from the network, and none to my knowledge, have yet shown a profit. Of course, the argument can be easily made that "it's too early..." to demand profits from them. Ummm... Ok. That too was said of the dot-com era's e-commerce sites. And, yes, the same was said of Amazon -- which lost lots of money -- until it finally turned a corner and finally became the sole and dominant virtual merchandise mart, that now turns a pretty penny as profit. But that is only one company of the multitude that started in the dot-com era. So I expect the same to hold true here.

Viable Business Models?
From a business model perspective, advertising-based is severely overrated for social networking sites. Investors are naive if they think that networks will survive and thrive with the addition of web advertising. I'd argue it's counter the social network culture: Web advertising turns people off by infiltrating, distracting and detracting from their social networking experience. The intent is to increase, enhance and expand their use and the value of the network -- not the opposite, which advertising typically does. Twitter appears to be shying away from advertising -- it would certainly destroy that medium! Facebook recognizes this and is experimenting with "engagement ads" integrated into the social networking experience. I'm still not convinced of this.

I am, however, a fan of the potential of "virtual currency". The network has value and people can exchange services within the network either in real money (e.g., dollars, pounds sterling etc.) or as virtual currency -- where the site acts as it's own virtual country and creates it's own virtual currency, (including an exchange mechanism and exchange rate) which can be bought with real money, and used within the confines of the site (or possibly other sites). Facebook is experimenting with this approach as well. Facebook has it's own internal virtual currency, growing out of its "credits" system, that is currently restricted to the company's internal "Gifts" application. At some point soon, Facebook plans to make the Facebook currency system available to developers (using Facebook APIs) which could produce a significant new source of revenue by taking a cut of the transactions as real money is used to purchase the credits or other currency usable only on Facebook. I think for this to fully work for participants there'd also have to be a way to reconvert the currency back into real money and withdraw it from the Facebook virtual world. I wonder if Facebook will allow this...real banking operation or leave it as the more advantageous, one-way, use-it-or-lose-it, gift-card approach.

It is not at all clear to me how Twitter will ultimately make money. Twitter essentially provides access and visibility to into what used to be invisible commentary on things (events, products, etc.) -- the instant communication, the messages, to participants sharing an interest. For many, it provides an instant pulse on a topic, product, service or event, and creates and sustains communities of interest. It enables people to emerge as influencers/message makers and as followers/message consumers. It allows company's to monitor sentiment of their products, brands and services -- which is a huge value to businesses. Thus it's great for building and monitoring a brand (personal, corporate, political -- doesn't matter), but how will it build revenue? From a technology standpoint, it's not unlike the Telco providers who charge for SMS messages... which is essentially what Twitter provides a short (140 characters) message service. But it would be extremely difficult for them to now charge users for it as they've established the bar at "free". Thus I expect it would be difficult to get users to pay monthly or annually to tweet. So... what do they do? Perhaps at some point they'll charge to search the tweet history, though Microsoft is now doing that with their new Bing search engine, for free. Perhaps they'll charge businesses for access to the system -- charging for the right to monitor sentiment on their products and services. It's clear that brand management and monitoring has real value to businesses, who are now increasingly using Twitter as part of both their marketing and customer service/support functions.

Other potentially viable models such as charging for membership, subscription, or for certain capabilities or services I believe are possible -- but the challenge is that the bar has already been set at "free" for most of these sites. Some sites, like LinkedIn, charge for additional services, a model which could work for a number of sites, but the additional services must offer real value to the participants and the community.

So for me, it's more a matter of timing for the larger sites, those which have demonstrated the ability thus far to grow and sustain the growth of thier networks and communities. However, until some of these sites can demonstrate a real return on investment (ROI) and sustainable business & profitable models, I cannot help but agree that social networking is powerful and useful to the participants, but to most of these investors, financially "naked" as Jim Goldman suggests.

Implications of Supreme Court Decision Not to Block Remote Storage DVR

The Supreme Court decision today chose not to review a Court of Appeals ruling that rejected claims by film studios and television studios stating that the network DVR approach would infringe copyrights. While recording programs ("time shifting") using a personal DVR is legal, the studios argued that a network DVR, one that was not in the home but operated remotely by the cable operator in a data center, was creating a temporary copy and was thus illegal. The court's decision not to review the case, affirms that the lower court ruling stands - use of remote DVRs are legal as well. The result of this decision has very interesting implications.

To be clear here's how it works:
A Digital Video Recorder (DVR) such as a TiVo is connected to your TV and has been deemed legal. In the past, the courts have ruled that time shifting content is legal, and not infringing on copyrights. Cablevision essentially built a remote DVR. Rather than sitting next to your TV, it resided in Cablevision's datacenter (or in "the cloud" as some will think of this). Aside from that, it did exactly the same thing. It was functionally identical: Users would be able to save shows, fast forward and rewind. Essentially the studios were insisting that by moving where the box lived, it somehow made it illegal. The Court of Appeals disagreed.

My thoughts on this decision and the implications:

• I believe the Court of Appeals got it right. Functionally there is no difference and thus no copyright violation. If it is performed locally or remotely and the capability is the same, the location of the storage or the location of the function is irrelevant. They are both time shifting content.
• From the cable operator's perspective, a network DVR will likely be much more efficient to operate and run. What they need is scalable and reliable infrastructure that allows users to perform individual time shifting on their stored programs. This is akin to an emerging "cloud service" infrastructure -- a lot of disk storage, and other software and hardware to manage each users storage of shows, and how to play it out efficiently. It is similar in some regards to existing on-demand services already offered by them, albeit with a much larger library of content, and users essentially determining the equivalent of an on demand playlists. Depending on how it's implemented it could be very efficient because they may not need one copy of the stored show (a file) per customer. Instead there can be one instance of the show and they can provide access to it governed by permissions, regardless of number of households/customers. So it is potentially very scalable, with a minimum of storage requirements, and could be easily tracked.
• It's potentially greener too -- they don't have to necessarily produce millions of DVR boxes that will later be discarded.
  
• It will broaden use of DVRs. This is a great thing for consumers -- people get to watch what they want, when they want it. Tivo has proved this. I would expect that this is also a good thing for both the cable operators and the studios/networks: People actually watch more TV -- just at thier own time. Now they have to figure out how to adapt to this behavioral change -- not fight it.
• It still has technical limitations: 1. A set top box is still required. Until technologies like Tru2way are implemented which provide streamlined interactive TV capabilities (e.g. the ability to use a remote control that comes with the TV to control non TV programming functions like a remote DVR) and the TVs incorporate them, a set top box of some kind will be required to process the forward, rewind, pause etc. signals. So why not get the DVR in the same box? This will hinder some adoption. 2. Performance. Because the signal to pause or rewind has to travel back up to the cable provider, and this could take a couple of seconds, the response time will not be as fast as if the DVR were sitting next to your TV. For some consumers, this will be a problem and another reason not to us a network DVR. 3. Reliability. If the service goes down... you can't watch your shows. With DVR boxes, it's all local, though in some cases the cable signal may still be required to watch the content. If it's unreliable... people will want the box rather than the service.
  
• It could lower DVR service pricing. With this remote DVR infrastructure approach, I would expect DVR service to potentially be less expensive to consumers on a monthly basis. Over time, I would expect it to eventually become part of the basic service as a common feature. One difference is that you can purchase a DVR and pay a one time fee over the lifetime of the box. You won't be able to do that with the service. Over time the service will likely cost consumers more, but it has the ability to continue to grow in capability (e.g., more storage for the same cost) -- which the DVR box could not.
  
• Or it could add additional DVR service tiers. Then again, they could price different tiers based on the amount of storage. This is an interesting possibility for a couple of reasons. First, it allows the operators to derive additional revenue for storing content. DVR boxes were always limited by storage, so you generally couldn't keep shows for very long -- or you had to make decisions about what to keep and what to discard. But you couldn't easily keep too many things forever. Now, however the operators could charge for different storage levels, allowing consumers to hold more of their favorite shows for longer periods. At any point does this become a "long term video rental"?
  
• It could open a new distribution channel and revenue stream for the studios. There is an opening here for the studios to potentially make money with long term content/program leases -- akin to video rentals. Consider the fact that the recording is done by the operator as a service for the customer. However, the biggest difference is that operator can now determine, monitor and record who is recording what. Given that, they insert themselves into the recording process, they now can exert control over what programming can be copied for free and what must be paid for... they could potentially become the new digital video distribution arm of the studios! Perhaps certain content, like on-demand movies, is only released through the cable operators as paid-for content. Perhaps if a customer wishes to store the program for a specific minimum period of time it requires a "digital video rental" fee. There are some really interesting possibilities here that could make the relationship between the studios and cable operators mutually beneficial. Playing this out a bit, the cable providers become another distribution channel, just like videos and iTunes are. Certain content is released on a schedule -- e.g. feature films go to video, DVD and to pay-per-view cable at a particular time. With DVR capabilities, Pay-Per-View potentially evolves into long term video rentals or sales, where the cable providers become the new "digital Blockbuster" -- enabling paid video recording of certain content for placement into a customer's online digital library.
• Cable based "iTunes"? I think a longer term the more interesting question is would this recorded content ultimately merge into our home entertainment library as just another piece of content? iTunes has defined one user interface for all kinds of content. Could the cable operators do this too? Some of them (like DirecTV) offer music channels. So a digital library via our cable company is not out of the question. Beyond that, would it then be allowed to be transferred to our iPhone or iTouch? Would it become accessible to our iTunes library and become accessible on other devices? I think this is a possible longer term opportunity...
  

On ad revenues:

• DVRs, regardless of form, were diminishing ad revenues because of the ability to skip. So the network DVR is really just an evolution of this and is going to erode it faster.
• I don't believe consumers will put up with the ability not to skip ads, if this functionality were to be removed (or enforced) by the cable operators.
  
• The Studios should seek how to leverage the proliferation of DVR use envisioned by this ruling, not fight against it. The Studios need to adapt to this not fight it. They've shown they can do it with music. Now figure out how to do it with TV content. This is boring to watch over and over again with each change in media. It happened with VCRs -- and look where a huge amount of studio revenues now come from!!! So I'm absolutely confident they can do it with "time shifted, file based programming". Network DVRs provide "on demand user selected programming". It could be easily tracked who is watching what, if the operators were willing to provide this data back to the studios. It also wouldn't be hard to add ad insertion capabilities as part of the DVR playback infrastructure -- so then targeted ads could be inserted by the cable operator based on fine demographic information -- and even if they were skipped they would still be seen and would be more relevant than other ads.
  
• "Skipped" ads still play -- just faster. When Tivo first came out there was the ability to skip ads built into the box. The studios pressured Tivo and Tivo caved on it, updating the boxes and removing the capability, only allowing fast forwarding. So now, ads can't be completely skipped, only sped through. That being the case, perhaps someone could figure a way to get their message across when played as a skipped ad -- it's really just faster frames per second. So it's a compressed timeframe and message. How about a 2 second spot ad? Gosh, now they really could do subliminal advertising!

On Competition:

• What happens to Tivo? Over time a majority of people will opt out of purchasing a DVR box. Some people will continue to buy them for any number of reasons (e.g. more privacy, more control, because they like technology and wiring things together). I think the question for Tivo going forward is how much of their intellectual property (IP) in the form of patents and possibly software (e.g. user interface/interaction) can they license to the operators? But that is a different business model than licensing or selling boxes to consumers.
  
• Other operators: With this decision, other cable operators will no doubt go down the same path as Cablevision offering their own remote DVR service -- perhaps competing on price, and possibly competing on features. This would be good, as we'd start to see competition emerge on capabilities and possibly on user interface. DVRs should be easy to use (as they seem to be thus far for the basic play/pause/replay capabilities) but can still use some improvements in content organization, access and replay -- I find the linear search of may cable DVR box to be a really limited organization and search mechanism -- especially as the disk drive sizes, and thus number of programs I can store, increase.

Overall, this decision will open up a whole new set of consumer oriented digital services that will be enabled through the cable operators, and embraced by consumers. And I believe that the studios can and will adapt, and just as with the VCR, will find this to be a great boon to their top and bottom lines.

Additional articles
Business Week
Los Angeles Times
Wall Street Journal Online
Barrons Tech Trader Daily
Paradigm Shifts: Remote Storage DVR


Additional commentary on Tivo and others:
http://blogs.barrons.com/techtraderdaily/2009/06/29/cablevision-network-dvr-gives-edge-over-satellite-rivals/
http://blogs.barrons.com/techtraderdaily/2009/06/29/tivo-shrs-slide-on-high-court-ruling-on-network-dvrs/

Digital Asset Management Market Update - Impressions from Henry Stewart DAM NY

My impressions of the DAM market after attending the Henry Stewart Digital Asset Management (DAM) New York, June 1-2, 2009.

The DAM market appears to be alive, with vendors continuing to innovate and grow. Over the past couple of years, more vendors have added on-demand / hosted / SaaS DAM offerings -- either their own or via acquisition (e.g., Open Text's purchase of eMotion) and added support for the XMP metadata specification (not quite yet a "standard") and most recently new user interfaces. Every conference has a theme and this time it appeared to be "User Interface/Experience" as many of the vendors (MediaBeacon, North Plains, Autonomy/Virage - MediaBin, and Open Text/Artesia) were showing off their new user interfaces.

MediaBeacon demonstrated their new R3volution 3.0 Widget Platform and R3Search, Organic Enterprise Search. MediaBeacon was the most innovative going with Google Web Toolkit (GWT) as a "standard" for their Widget Platform, which allows users to easily include any other GWT widget into the UI. This allows users to include all the GWT and Google social networking widgets (chat, IM, etc.), for easily constructing powerful user defined or company defined portals which neatly integrate DAM. They also added faceted search based on SOLR an open source extension of the Apache Lucene search engine. Users see groupings of tags for the images in front of them and then filter further by drag and drop of filters into the query palette. Users can easily filter assets by these drag and drop tags, without typing. MediaBeacon also added drag and drop of assets onto metadata "stamps" -- a grouping of metadata that can be reused and attached to assets -- or users can drag and drop stamps onto individual or groups of selected assets to apply predefined metadata to the assets. I've always felt that DAMs exposed metadata too much -- users should work with metadata without knowing that they're working with it. The trick is to incorporate it into the UI in clever ways. I like MediaBeacon's approach a lot because it hides the metadata manipulation behind simple drag and drop user interactions, and makes the user experience much more a visual user experience.

Note: this kind of drag and drop metadata application was first available in a limited form in Adobe's Photoshop Album software -- a standalone, personal desktop image management program. You could have an image represent a tag and then drag and drop that image onto other pictures to apply the tags (metadata). It made grouping pictures of friends, family, events, locations, etc. very easy to do and you didn't even think that you were adding metadata. That was the key. More of the DAM products need to do this -- make the application and manipulation of metadata a background operation, hidden under well designed user experiences.

MediaBin, now called Autonomy Virage MediaBin, (which is a mouthful, and frankly a real branding challenge -- more comments on this below) was demonstrating the new MediaBin Version 7 -- an integration of the Autonomy IDOL conceptual search technologies and Virage search and video technologies with the MediaBin DAM all expressed through a new UI. The combination provides a very rich search environment, probably one of the richest of the DAM products. It includes (not an exhaustive list):

• Full text search
• Faceted search
• Speech to text for video (from Virage) with search of the text and return of keyframe accurate references back into the video
• Speech highlighting as it is spoken (from Virage)
• Easy filtering of assets based on metadata
• and drag and drop application of metadata (similar to MediaBeacon)

The UI also displays a tag cloud for common metadata. The search capabilities are deeply integrated into the UI and user experience. Gone are the multiple windows that plagued previous MediaBin user interfaces. MediaBin also (finally) adds dynamic collections (that refresh each time a user accesses them providing users with the most up to date set of assets that match the criteria defining the dynamic collection), a capability that most DAMs have had for a while.

This was the first major release of MediaBin since the acquisition of Interwoven by Autonomy. It's clear that Autonomy is attempting to maintain all the brands somehow for a period of time. While understandable, it's incredibly confusing. Leading with Autonomy and trying to keep the Interwoven, Virage and MediaBin brands is certainly desirable for a time, but it's not clear where the MediaBin product lives, nor is it possible to easily find information about it. At the time of this writing, the Autonomy, Interwoven, Virage, and MediaBin web sites are not in sync. Trying to find information on the latest MediaBin DAM release can only be found at http://www.autonomy.com/VMB7 a link that was buried in the MediaBin 7 press release. Clicking on all the others, including the "Digital Asset Management" link on the Autonomy home page, take you to the outdated Interwoven/MediaBin information rather than the Virage MediaBin 7 page listed above. Incredibly confusing.... and something that needs to be addressed soon!

North Plains was showing their recently released publishing platform for trade book publishers and their video manager. They had demonstrated TeleScope Publishing Platform (TPP) at both the London and NY book fairs where they published a book in 48 hours to multiple electronic formats, as well as a bound and delivered, print-on-demand, 6x9 edition. Not that anyone would actually publish a book that fast but what it proved is that it's possible for book publishers to significantly reduce the publishing time for multi-channel book publishing. It provides end-to-end capabilities including a lightweight commerce portal and marketing program tracking tool. TPP is an application that actually doesn't require the Telescope DAM. It is a real differentiator for the company -- it's a clearly defined application that has real business value to a very well defined audience. HarperCollins was the first to sign on. And it's rumored that there are a couple others in the pipeline. I suspect the publishing industry is watching how HarperCollins fares and will take notice of this offering.

I had a chance to take in some of the conference as well. While I'm sure that there were many interesting DAM user presentations, the two that caught my attention were Boeing's 787 Dreamliner eGallery and Showtime.

Boeing's presentation was titled "Changing the Rules of the Game: How Boeing is Leveraging DAM to Connect Customers with Suppliers Across the 787-Supply Chain via the Dreamliner eGallery". A clear descriptive title to be sure. However, Boeing's Dreamliner is a fascinating project in and of itself where the brand marketing is entirely about ecofriendly. It is a thorough application of the idea, but the Dreamliner program goes far beyond than that. It fundamentally changes how Boeing builds planes, interacts with their suppliers, and serves its customers -- allowing custom building of a plane, with interchangable parts (what a novel idea!), from different suppliers -- and providing a showroom (both physical and the virtual eGallery version) where buyers can examine and select all the components of the plane that they want. No more traveling from one seat supplier to another a thousand miles away, trying to remember how comfortable your bottom felt. You can do it all in one place. And similarly customers can preview and select all the components online via the eGallery. It's a purpose-built DAM application that stays within the Dreamliner ecofriendly brand: By allowing customers to view and select components (seats, coffee makers, TVs, etc.) via a web browser, it saves tons of paper (from not printing all the suppliers product literature), travel $ (including fuel) and makes selection a much more convenient and easy process. By requiring suppliers to provide images and metadata for their products for the both the egallery and physical showroom, Boeing becomes more like a typical retailer -- requiring its suppliers to provide the goods that it can put on its shelves and the pictures and descriptions it can put into its circulars. A fine use of a DAM. The Dreamliner program is also more economical for plane financiers who don't tie up as much money when airlines wish to shed or resell planes: Did you know that it currently takes a month to convert the engines from those your airline uses to the ones mine uses? Now it can be done in a day allowing them to offer better financing terms. Boeing has clearly thought through the whole set of stakeholders and is providing, in my opinion, a very compelling brand and offering. Very cool stuff!

Showtime demonstrated how they have become much more agile in responding to the advertising and marketing needs of their programs. Paul Nicholson, VP Print and Broadcast Production at Showtime Networks has done a masterful job of using a DAM and XMP metadata to automate and integrate a multiple systems into a cohesive enterprise-class system for managing and facilitating the produciton process for all of their print and on-line marketing materials. Using MediaBeacon and its deep support of XMP they've been able to increase the volume of material they develop and deliver (e.g., posters, bus covers, on-line ads, etc.) and have significantly reduced the amount of time it takes to produce each piece. It's a very impressive system for it's integration with existing systems, broad adoption throughout the creative services group, the flexibility, visibility (into the state/progress of things) and cost reduction it provides. I'd seen it presented before but it doesn't get old -- it still impresses me. It shows how DAM can provide real value to an organization.

One emerging area for DAM appears to be Open Source. On the one hand, this seems to be a natural occurance as there are open source versions of many other content technologies (e.g. web content management systems, search engines, content mangement systems, etc.) However, I've long thought that a good open source DAM would be far too specialized and couldn't be done well enough as an successful open source project. There's a lot of coordination required between the various components and functions of a DAM that I believe would make it difficult to do anything more than something with rudimentary or basic DAM capabilities through open source approaches. I still hold to that position. I was surprised to see Openedit exhibiting at the conference -- it was the first conference that I'd been to where an open source DAM vendor exhibited. Like with many open source projects, the revenue model is based on services. This may fit well for DAM as many implementations require customization. But Openedit's capabilities struck me as fairly basic. Thus anyone who would use it for a project of any significance would appear to require a lot of services, it could therefore easily turn out to be a better proposition to go with a non-open source vendor, not only for the comparable cost, but for the broader capabilities as well. This will be an interesting area of DAM to watch going forward.

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