The Online Reporter 728 April 15, 2011

THIS WEEK IN CONTENT DEALS

THIS WEEK IN FINANCE DEALS

IPAD & THE MANY OTHER TABLETS

ENABLING TECHNOLOGY

HOME NETWORKS

LEGAL MATTERS

LIES, DAMN LIES AND STATISTICS

 

ONLINE MUSIC SERVICES

SHOW TIME

SMART TV

DIGIGRAMS

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Quote of the Week…

“Consumption of video over the Internet is no longer a millennial-generation phenomenon; it’s an activity that crosses all age groups,“ said Francesco Venturini, Accenture’s global broadcast lead. “Video over the Internet is well on its way to becoming a mass medium. Furthermore, it’s clear that consumers are ready and, in some instances, may be ahead of the industry in terms of the vision they have for how, when and where they watch and interact with video content.“

Stat of the Week…

OTT TV brought in $1.6 billion last year, up 34% from 2009, according to IHS. Internet TV advertising was the biggest contributor at $719 million.

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P1905 Looms as Next Major Development in Home Networks

– Combines Ethernet, HomePlug, MoCA & Wi-Fi

Looming even larger than G.hn (HomeGrid) over wireline home networking is the very real possibility of the proposed P1905 IEEE specification. Under development since December 2010, it promises a single standard that will serve as a bridge to and from:

– Ethernet wiring

– HomePlug AV for electrical wires

– MoCA 1.1 for coax

– Perhaps most importantly, Wi-Fi

The new versions of HomePlug and MoCA that are under development are not included.

Noticeably missing are HomePNA that Sigma Technologies has been pushing and the coming G.hn for electrical, coax, telephone and Ethernet wires. The spec is being written so that other home network technologies could be added. A representative from HomePNA and the G.hn group said that they want their network technologies included in P1905.

It’s possible that the proposed P1905 is a ploy to prevent G.hn’s success.

Including Wi-Fi gives it the advantage of having a wireless capacity, which is something no other wireline standard has. For example, consumers could use MoCA or HomePlug to wire a bedroom where the Wi-Fi reception is weak from the central Wi-Fi router. A P1905/Wi-Fi adapter could be used for the last 10 feet or so to a TV set with Netflix or some other OTT service.

Including MoCA gives P1905 a major advantage in gaining a large base of compatible installations that includes the world’s cablecos plus Verizon and DirecTV.

Broadband and pay-TV service providers find it very difficult to switch home network standards. There are lots of people to train, thousands of installation trucks that need some of the new gear and warehouses that have to be stocked with the new technology. It would cost the providers that have standardized on MoCA billions of dollars. They would need an overwhelming technology breakthrough, an enormous reduction in costs, or both to make a change that does not include MoCA compatibility.

The P1905 Gang

A group has been set up under the auspices of the IEEE to develop P1905.1. It held its first meeting in December 2010. Atheros, Broadcom, Cisco, Entropic, Intel, Marvell, Toshiba and others are writing a draft standard.

France Telecom Orange is a main pusher, the same France Telecom that backed G.hn in its early days. “As there is not a single networking technology that ideally addresses all of today’s applications, platforms, and environments, IEEE P1905.1 represents a fundamental advancement for home networking,“ said Paul Houzé of France Telecom-Orange, and chair, IEEE P1905.1 Working Group. “Creating a bridge between the world’s most popular wired and wireless technologies will bring much-needed synergy, making home networks easier to use and elevating their overall performance.“

 

Current Voting Member of P1905

Atheros Intel
Broadcom Lantiq
Cisco Marvell
Entropic Panasonic
France Telecom Sigma Designs
HD-PLC Alliance SPiDCOM Technologies
HomeGrid Forum (G.hn) STMicroelectronics
HomePNA Alliance Toshiba
The HomePlug Alliance and MoCA are not members. However, HomePlug chipmakers Atheros and Sigma Designs are members, along with MoCA chipmakers Entropic and Broadcom.

The P1905 group said the effort is an attempt “to support an expanding array of connected consumer electronics, such as televisions, computers, game consoles and smartphones.“ It might have added tablets because it now looks as if every first-world country will have at least one, maybe two or three.

Sharing digital content, the group said, “requires a standard capable of uniting disparate wired and wireless elements into a hybrid home network.“ A built-in QoS would automatically switch to a different network scheme if the one being used degrades.

The objectives of the P1905 group are:

– Streamline network performance by dynamically managing packets from different wireless or wired interfaces.

– Maximize bandwidth to ensure reliable content delivery across all home networking technologies.

– Facilitate installation, setup and management plus provide better diagnostics and controls.

– Increase device cooperation, communication and co-existence in home networks.

– Enable active path selection for maximum traffic efficiency and network load balancing.

– Energy management for optimized power consumption.

The proposed standard calls for an abstraction layer that supports multiple home networking technologies. It is inclusive, not exclusive.

The abstraction layer would provide for:

– A common data and control service access point to all the home networking technologies.

– Packets arriving from upper protocol layers or underlying network technologies.

– End-to-end Quality-of-Service (QoS), which is very important to the pay-TV services.

The specs will include procedures, protocols and guidelines to add devices, set up encryption keys, extend network coverage and provide network management features, such as neighbor and topology discovery, path selection, QoS negotiation and network control.

Any and Every Device

Perhaps the most important aspect of P1905 is that it could eventually be built into TV sets, Blu-ray players and smart TV adapters like Apple TV and Boxee’s many boxes, assuming the price of the chips is a reasonable add-on cost. That would make P1905 the standard for home networking, and it would truly deliver plug and play.

Broadcom’s Views

We asked Broadcom’s technical director Stephen Palm about P1905. Broadcom is an active member in the P1905 movement.

Palm: The standard will benefit all broadband and pay-TV service providers because they are also deploying their services to mobile/tablet devices as well as to wireline devices like TV sets and PCs.

TOR: How long could it take to get to a standard? To get chips? 2012?

Palm: Chips are expected late 2011 or 2012, but always depends on the IEEE process. For some vendors that already offer multiple network interface technologies, it is a software upgrade.

TOR: Will it be an expensive chipset?

Palm: Some vendors are very adept at combining several technologies and specifications into cost-effective SoCs.

TOR: Shouldn’t DLNA have done this? Isn’t that what DLNA is about? Multiple network technologies inside one interface?

Palm: P1905 is basically an enhancement to layer-2 (MAC) functionality. Technically it is a bit more. P1905 wraps and abstracts one or multiple MAC/PHYs. From the application (e.g., DLNA and others) point of view, P1905 will be seen as a “single“ device instead of different MAC/PHYs, each requiring a unique management, security and QoS method.

While DLNA points to some layer-2 technologies such as Wi-Fi, Ethernet and MoCA, the bulk of the DLNA specification is at layer-3 and above.

P1905 is the kind of technology that DLNA could point to in the future.

Next Generation MoCA & HomePlug

MoCA 2.0 reportedly has 400 Mbps of net throughput compared to the existing MoCA 1.1’s 175 Mbps. A channel-bonded version of 2.0 will operate at 800 Mbps. Production of devices with MoCA 2.0 are expected in early 2012.

HomePlug v2 reportedly offers net throughputs in the 200 Mbps to 500 Mbps range compared to the existing HomePlug AV’s 40 Mbps to 90 Mbps range.

The new MoCA 2.0 and HomePlug v2 will reportedly interoperate with their existing standard.

The Cable Show

June 14-16, 2011

McCormick Place, Chicago, Illinois

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75% Now Viewing OTT Videos

Here’s proof of what many industry experts suspected: OTT has arrived or because more than 75% of all consumers in seven countries are viewing video over the Net, not all on the living room TV set. At least, not yet!

The numbers come from an Accenture survey called “Video-Over-Internet Consumer Usage,“ which surveyed 6,500 consumers. Responding “yes“ to OTT were:

 – 85% age 18 to 24

 – 82% age 35 to 44, the prime demographic for advertisers

 – 64% over the age of 65

They were in Australia, Brazil, Germany, Italy, Spain, the United Kingdom and the States.

“Consumption of video over the Internet is no longer a millennial-generation phenomenon; it’s an activity that crosses all age groups,“ said Francesco Venturini, Accenture’s global broadcast lead. “Video over the Internet is well on its way to becoming a mass medium. Furthermore, it’s clear that consumers are ready and, in some instances, may be ahead of the industry in terms of the vision they have for how, when and where they watch and interact with video content,“ the survey said.

Popular Features

The main use for OTT at 40% is catch-up TV. Sorry Google, Facebook, Twitter and Microsoft, but only 14% said they want to surf the Web on their TVs and only 11% want interactive and social networking functionality.

“Viewers want many of the same freedom of choice options that they experience when using their computers to apply to video consumption,“ said Venturini. “They value the ability to watch content anytime; however, they do not necessarily want to surf the Web and they see relatively little value in using the TV as a gateway device for other applications.“

Tablets

Over half (54%) of tablet users are interested in using them for video-on-demand and catch-up functions. Here’s good news for content developers and pay-TV services that offer simultaneous Twitter, chat or Facebook use. About 44% of tablet users are interested in the ability to interact with on-air programming to receive additional content related to what they are viewing.

Video Quality Is Most Important

About 48% of those surveyed in all age groups said clarity of picture and speed of content delivery are the most important technical features they look for in an Internet video service. HD was second at 27%.

The ease of use in search and content management ranked high with 14%. The use of recommendation engines was 11%.

Venturini said, “One of the major issues providers must anticipate and solve if they are to be successful in the IP video marketplace is the ability to handle congestion on the network and perform streaming in such a way as to deliver a high-quality experience.“

Form Factors

TVs still dominate consumers’ viewing preference (at 92%) but the diversity of electronic devices that consumers now use to view video is very evenly divided:

– 75% use desktop computers

– 72% use laptops

– 63% use mobile devices, presumably smartphones

– 21% use tablets such as the iPad, but Accenture says, “It is just a question of time before that number climbs significantly.“

“These results suggest a ‘form factor’ challenge when it comes to mobile video viewing,“ said Venturini. “With broad access to video across devices with large screens, mobile video viewing will rarely be the first choice among many consumers. Because of this, providers will need to focus on creating video content specifically for smaller screens such as mobile phones and tablets or on creating programming that complements the large-TV-screen experience.“

Watching video on devices other than the TV is increasing among all age groups. Viewing increased by:

 – 35% on laptops

 – 28% on desktop computers

 – 26% on Internet-connected TVs

Multi-Tasking

The nature of the entire viewing experience, including traditional TV watching, has changed, the report said. There is no longer a single delivery channel or device that receives the uninterrupted attention of viewers. While watching TV:

 – 81% multitask with other devices

 – 48% use laptops

 – 41% use mobile devices

 – 28% use desktop computers

Venturini said, “This fragmented viewing experience may appear to present challenges to advertisers, but companies able to leverage this multi-device, multi-channel addiction of consumers across devices may gain even more viewer awareness and loyalty.“

And…

The survey showed that large percentages of consumers are ready for a multi-device experience that goes beyond simply replicating traditional TV on another device, according to Accenture. “Content is important, quality is critical and personalization of the service is a must,“ it said.

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THIS WEEK IN CONTENT DEALS

Companies Details
IAC, Google Media corporation IAC with network of Web sites including Ask.com, Match.com and others, made a deal to extend its sponsored listings and search engine deal with Google through 2016.
Microsoft, thePlatform, Comcast Microsoft partnered with video management company thePlatform to deliver cable TV provider Comcast’s “TV Everywhere“ streaming service.

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THIS WEEK IN FINANCE DEALS

Companies Details
Intel, Kno, Advance Publications, Floodgate Fund LP, Andreessen Horowitz, First Round Capital, SV Angels Intel’s venture capital arm contributed $20 million to tablet and digital textbook developer Kno as part of a $30 million investment round with participation from Advance Publications, Floodgate Fund LP, Andreessen Horowitz, First Round Capital and SV Angels.
Ziki, Schooner Capital Cloud-based worldwide HDTV quality video distribution platform Ziki secured $4 million in a round of funding led by Schooner Capital.
KIT Digital, ioko Video asset management solutions provider KIT Digital purchased cloud-based video delivery company ioko in a $79.4 million deal.
Zencoder, Andreessen Horowitz, SV Angel, 500 Startups, Lowercase Capital, Ignition Partners, Founder Collective Audio and video transcoding service Zencoder closed an investment round with $2 million in new funding from investors Andreessen Horowitz, SV Angel, 500 Startups, Lowercase Capital, Ignition Partners and Founder Collective.
Google, PushLife Google acquired mobile music streaming platform PushLife that allows users to sync tracks from their computers to their phones for $25 million.
Payfone, American Express, Rogers Ventures, Verizon Investment, Opus Capital, RRE Ventures, BlackBerry Ventures Mobile payment processing platform Payfone secured $19 million in a round of funding led by American Express, with participation from Rogers Ventures, Verizon Investment and previous investors Opus Capital, RRE Ventures and BlackBerry Ventures.
WhatsApp, Sequoia Capital Cross-platform mobile messaging application WhatsApp landed $8 million in new funding from Sequoia Capital and other investors.
SocialGuide Real time TV guide and social TV platform SocialGuide received $1.5 million in new financing from angel investors and Alex Zubillaga.
GoldSpot Media, Berg Enterprises, Exa Ventures Interactive rich media mobile Web solutions company GoldSpot Media scored $12.05 million in a Round B of venture capital financing from Berg Enterprises and Exa Ventures.
Blinkx, Burst Media Video search engine Blinkx acquired online ad network Burst Media in a deal valued at $30 million.

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IPAD & THE MANY OTHER TABLETS

RIM’s PlayBook Impresses NY Times Blogger

New York Times blogger Ian Austen went to RIM last week to see the $499 PlayBook tablet that is to start shipping next week. He was impressed with it just as we were at CES in January. He said:

– It plays the millions of Adobe Flash videos, something Apple’s iPad cannot. And it does it without draining the battery as many Android tablets do.

– RIM said the PlayBook has hardware and software that outperforms more powerful computers playing Flash videos.

– PlayBook has an HDMI out connector that connects to TV sets for playback. Austen said the HD videos looked like they were coming from a Blu-ray player. And we know people love HD.

– RIM acquired the software interface designer TAT (The Astonishing Tribe) to help it develop the look and feel of its user interface. Austen said that as a result the PlayBook “will look familiar to any iPad user but is nevertheless distinctive.“

– PlayBook is aimed at RIM’s historical base of BlackBerry users — corporates, institutions and governments.

To paraphrase what Matthew McConaughey said in the flick “A Time to Kill:“ Close your eyes and imagine doing those things with an Android-based tablet.

 

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USA Today’s Baig Likes the PlayBook

– Points Out Shortcomings Too

USA Today technology columnist Edward Baig generally praised the RIM PlayBook that started shipping this week.

The complete article is at: http://www.usatoday.com/tech/columnist/edwardbaig/2011-04-13-baig-blackberry-playbook.htm

On the plus side for him were:

– The size of a paperback and weighs less than a pound

– Plays Adobe Flash

– Connects to a TV with an HDMI cable for business presentations and gaming

– Connects to a stereo with an HDMI cable to play music while working on an app

-A secure, enterprise-friendly device

– “A multitasking marvel for running numerous apps at the same time“

– Gesture-based operating system

– The BlackBerry Bridge software for connecting via Bluetooth to a BlackBerry phone and from there to a 3G cellular network

– Only one mobile broadband data plan is needed. Sprint and others promise 4G models of the PlayBook later this year

– The ability for Bridge to synchronize with a BlackBerry smartphone and the corporate network for e-mail, contacts, calendars, messaging and memos

– Stereo speakers

– Battery usage of eight to 10 hours

On the down side, he said, were:

– The sometimes-cranky, not-quite-finalized software

– Far fewer third-party apps than its rivals: 3,000 compared to the iPad’s more than 65,000; RIM has promised that by summer Android, Java and BlackBerry apps can be converted to run on the PlayBook

– The smaller 7-inch screen compared to the iPad’s 10 inch screen

– The lack of an alternative built in for renting or buying movies and TV shows as there is with iTunes

Whether it does a better job of taking market share away from Apple remains to be seen, but most every lover of the BlackBerry is certain to take a serious look at it, at least for business.

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Wall Street Journal’s Mossberg Says Wait for Improvements Before Buying PlayBook

The Wall Street Journal’s technology columnist Walt Mossberg was more negative than positive in his review of the newly available RIM PlayBook. In fact, he said wait for future improvements before buying.

He turned thumbs down on:

– The lack of a built-in cellular connection

– The lack of basic built-in apps such as e-mail, contacts, a calendar, a memo pad and the BlackBerry Messenger chat. They only show up when the PlayBook is connected to a BlackBerry, but RIM said they would be added this summer

– The requirement that automatic syncing lasts only as long as the PlayBook is connected to a BlackBerry

– The smaller 7-inch screen

– The lack of a video store

– No video-chatting software

– The app shortage and its inability to run any of the 27,000 BlackBerry apps; it’s too soon to say how the BlackBerry and Android apps will run on the PlayBook

– No functions for sharing pictures

– No one-touch icon for airplane mode

– The inability to add Web bookmarks to the ones that come pre-installed

– Battery usage of about five to six hours

– Browser is slow to load

He turned thumbs up on:

– The QNX OS that he called “handsome and quick“

– The “smooth and fast“ user interface: apps that are open show as images at the top of the screen

– Beautiful screen

– Better cameras than the iPad’s

– Built-in connector outputs “gorgeous“ HD video to a TV

– Browser does the best job with Flash video and Flash sites of any that Mossberg has seen, “far better than on any Android device“

– Its sturdiness and, although 14% thicker than the iPad 2, it’s about one-third lighter

Mossberg said the necessity of connecting to a BlackBerry for apps, and connecting to a cellular network plus the promises of future software enhancements prompts him to say wait until those arrive before purchasing a PlayBook. As is, the PlayBook is “a companion to a BlackBerry phone rather than a fully independent device.“

“I recommend waiting on the PlayBook until more independently usable versions with the promised additions are available,“ Mossberg said.

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ENABLING TECHNOLOGY

Intel Aims New Atom Z760 Processor at Tablet Market

Intel’s latest effort at replacing ARM-designed chips in the tablet market is its Z760 series of Atom processors that run Android, MeeGo or Windows 7. By the end of May, according to Intel, they will be in tablets and other portable devices such as “mobile clinical assistants, ruggedized industrial tablets and portable point-of-sale systems.“

The processor is 60% smaller than previous generations with a lower-power design for fanless devices. Intel said the Z760 series offers:

– Increased battery life, up to all day

– Enhanced performance, especially improved video

– Fast Internet browsing

– 1080p video decode with an integrated HD decode engine that uses less power

– Support for HDMI output and DisplayPort

Adobe Flash for video and Flash-based gaming

– Smaller, thinner and more efficient form factors

– Enhanced sleep to save power when it’s not active

– Intel Wireless Music

– Intel Wireless Display

– PC Synch

– Fast Boot

It’s a lot. Whether it can compete with ARM processors in the tablet market remains to be seen.

Intel said the Z760 will be in 35 tablets and other form factors from the likes of Asus, Evolve, Fujitsu, Lenovo, Motion Computing, Razer and Viliv that will run a variety of operating systems. The initial list, as best we can tell, mostly use Windows 7, not Android or the MeeGo OS Intel was developing jointly with Nokia.

– The Asus Eee PC Seashell, model 1201PN-PU17-RD has a 10.1-inch touchscreen and slide-out keyboard. It runs Windows 7.

– A tablet from Evolve that runs on Windows 7. Evolve is the Elsevier brand for electronic learning solutions that serve the nursing and health professions.

– The Lenovo Ideapad Slate tablet that runs Windows 7.

– The Samsung Series 7 tablet has a slide-out keyboard and runs Windows 7.

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Adobe Offers Development Software that Runs on iPads

Apple may have kept Adobe’s Flash off its iOS products, but Adobe has developed software that makes it easy to develop software on tablets.

– Eazel lets tablet users draw with their fingers on the tablet’s touch interface. The finished image is sent to a PC for inclusion in the app.

– Color Lava lets tablet users mix colors on the touchscreen to create swatches or patterns, which can be sent to a PC.

– InDesign has new tools that simplify the creation and publishing of interactive magazine and newspapers for tablets.

– Photoshop Touch SDK lets developers build tablet apps that sync with desktop software.

Adobe said it’s offering a month-to-month subscription model. Adobe Photoshop will be $35 a month. Adobe’s full software suites will cost $129 a month. Adobe’s software is pricey if purchased — in the $700 to $1,000 range.

Adobe expects the new tablet add-ons will be in iTunes on May 3 at a cost between $2 and $5. It will next develop versions for use on Android tablets and RIM.

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Verizon to Carry Video Content to Any Device on the Planet

– Netflix-Class Services Can Be Built Overnight and Delivered Cheaply

– Verizon Attacks the Scaling of Internet Video Delivery

– Management and Security so Content Owners Can Track Assets

Verizon, with its global network reach, is setting out to revolutionize the delivery of digital videos to the home, which is likely to trigger a global response from telcos everywhere, trying to follow suit in their own territory.

Verizon has developed the ability for anyone with content rights to create a Netflix type of online video service overnight. Instead of needing an application to be written for each and every device before it can play on them, this service will take content delivery and make it a cloud application, likely to need only a browser in order to play the content. The company says that it has multiple backbone lines across the globe delivering video at between 40 Gbps and 100 Gbps for this service.

Verizon has lined up best-of-breed technology suppliers, including Technicolor for content creation and post-production knowhow, Motorola for media transformation and digital workflow, Alcatel-Lucent for content delivery and unicast adaptive streaming and Hewlett-Packard for high-end ProLiant servers.

Faultline said a few weeks back, reporting from the IPTV World Forum in London, that wholesale CDNs were going to be all-the-rage, and that many of the suppliers there were targeting the space. Well, Verizon has gone one better, and brought three years of effort, the involvement of hundreds of employees and what by telco standards is a meager budget of $370 million to bear on something more than a CDN. This is an all-singing, all-dancing management suite and network that will change media distribution on the Internet and in the process attract the major TV broadcasters, and even some of Verizon’s rivals, causing them to put more and more assets onto the Internet in more and more places.

Right now the US national broadcast networks — Fox, ABC, CBS and NBC — all build their own major Web portals, but their content could be distributed through hundreds of partners on the Web, except for one thing — once that content is out of their hands, how do they know that it won’t be stolen, pirated, and generally used, but not paid for, in any number of ways?

One answer to that has been the creation of specialized services such as Hulu and Hulu Plus by broadcast network owners, which keeps such content under the networks’ direct control — but eventually they would love this to be like physical DVDs — with inventory controlled, yet distributed widely, not only around the US, but around the world to thousands of retailers, with delivery, transcoding, and encryption all taken care of and delivered as unicast streams to consumers on any device imaginable. A sophisticated management system for such an undertaking is a must, given the complex content distribution rights they each have for their content.

Overnight, Verizon solves two problems by introducing such a service — it can vie for business with customers like Hulu and Netflix, offering them a route to market in return for cash. At the same time it would then take a great video weight off its core Internet lines, distributing them instead to secure appliances servers all over its network for last-mile access delivery by the network, which controls the consumer’s broadband line.

So day one this goes up against Akamai and other CDNs, and although Verizon does not describe the internal network architecture to its digital media services system, this will create great deals for some of the innovators in their field of CDNs and video transcoding for supply contracts with Verizon.

But the implications and the rivalry don’t stop there. Verizon is trying to manage every aspect of the process, so videos ingest into the system via the Web; workflow management to deliver orders (video streams) to Web retailers and on to customers; security and delivery of packages in the appropriate DRM and format for a given device; fault tolerant mirrored central servers for the US in southern California and northern Virginia; a metadata management scheme so that content owners can pick their own metadata, and then choose which search engines to expose this to.

We are making the assumption that the management of transcoding should take place as close to the edge of the network as possible — Verizon doesn’t want multiple copies of the same content travelling over and over again across its network, so some form of local storage and local transcoding has to be assumed or else a different screen resolution on a device means delivering it to that region all over again.

This is why it is so important that content businesses can get a transparent report of where its assets lie in the network at any point, and how much of the content has been consumed — Verizon talks about SKU reporting (reporting of stock keeping unit codes) and about a unicast delivery service as part of the overall media platform, and this not only includes delivery, but packaging — so which combination of cross promotions and other video assets will travel together with the content — and this will extend to advertising.

Verizon says that its advertising platform will include real time and localized ad insertion and advertising placement analytics, even down to personalized advertising delivery. This is a hugely ambitious play to carry video over the Internet as an advantage, not a liability.

Verizon removed the cover on all of this at the NAB Show in the US this week and said that already four of the top five US TV networks were trying the system out and that it additionally has service trials with Turner Broadcasting, Hearst Magazines and The Associated Press. It also insisted that rivals such as cablecos and existing services such as Netflix are openly invited to become customers.

At first glance, this is a major US telco offering a video management service like Brightcove, but in truth this is the company’s answer to the massive increase in video traffic which will create a separate network inside the Verizon network, segregating that traffic. In the words of Verizon technology VP Stuart Elby, “Video travelling over the Internet is going to suffer in quality, we are going to hit a capacity wall. We wanted to introduce this service before our customers hit that wall.“

Another thing this is going to affect is how we search for commercial video on the Internet. Companies like TiVo, Rovi and NDS have all made major plays to help pay-TV operators create search indexes in the cloud, much of which relates to having reliable metadata available for search engines. Verizon customers will be able to decide which search vendors have access to its metadata to find its content, which could provide significant video leverage against the likes of Google.

Verizon says its digital media service is the first of its kind and will automate previously manual workflow processes associated with formatting, managing and delivering digital media to virtually any device or platform on a large scale. As a result, content owners and digital retailers will be able to more effectively produce, manage and distribute premium programming to consumers when, how and where they want to view it.

Verizon says that the majority of the patent-pending technology was created by its own staff, with only some additional technology brought in from its list of technology partners. So far about 200 Verizon developers have worked on the project, in addition to hundreds of other non-developer staff.

The service, under development at Verizon for nearly three years, is currently in a second beta with nine charter content-creation companies. It will be available for commercial release sometime in July, said David Rips, president of the Verizon division that’s overseeing the project.

This report first appeared in Faultline.

Is Your Company Ready for Google’s Chrome OS?

Google Wants It to Do to Windows PCs What Android’s Done in Smartphones

Google’s Chrome OS is coming to hundreds of thousands of PCs beginning this summer. At least that’s what Google hopes.

Android hurtled out of nowhere to become the dominant operating system in smartphones and is second only to Apple’s iOS in tablets. Google intends to do the same with the Chrome OS by shipping it on hundreds of thousands of cloud computers, primarily laptops at first.

Samsung and Acer are scheduled to ship the first of them this summer, both using Intel’s Atom processor.

Google has positioned Chrome as THE operating system for a coming avalanche of cloudbooks and other instantly-on-and-online devices that could substantially cut into the Windows market for portable PCs and tablets.

It is aimed initially at the corporates. American Airlines, Cardinal Health, Intercontinental Hotel Group, Kraft, Logitech and Virgin America have tested the Web-only product using Google-supplied laptops.

Get ready for Chrome OS! Rider Research has prepared an executive briefing paper on Chrome — what it is and its likely impact.

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Verizon to Deploy Motorola’s Multi-Screen Platform

– Pay-TV Companies Want to Distribute Video to Tablets

– Tablet Market’s Strongest Suit May Lie in Home Video

Enhancements to Motorola Mobility’s Medios multi-screen service management platform came first. Motorola then added a social component called SocialTV that is geared to tablets and smartphones with HTML5 browsers like the iPad, as we reported in a prior issue.

The SocialTV Companion Service is a good example of how a supplier can experiment with a new addition to a TV offering on a secondary screen before taking on the bigger technical and customer satisfaction challenge of integrating the two completely. Integrating the new feature with set-top boxes is the plan, but for now it will be marketed at service providers as a way to add social elements easily to their content. They will do this by developing portals that support social networking and interactive applications like polls or in-content purchasing — these will all relate to the program on the TV screen, but the social element will be viewed on the secondary device: the tablet. The module includes a social loyalty feature that will award points when viewers use the system to rate shows, post comments or even watch ads.

Verizon is the first service provider to go public about using Medios, which underpins its Flex-View video-on-demand offering. It may well add the social module too, as a way to bring interactive qualities to its TV shows without touching the set-top box. Motorola says the implementation would take about eight weeks for a carrier. If it succeeds in attracting cablecos to Medios, it could create competition for Canoe Ventures, the cross-MSO joint venture focused on rich media and interactive ads.

Motorola’s moves are thrown into sharp relief by a recent report from Informa, forecasting that by 2013 there will be more over-the-top video viewers than IPTV customers. The aim for anyone in the video value chain, then, is to get in on that act.

The aim of Medios is to integrate Web content with walled garden content on both managed and unmanaged networks and the recent purchases enhance it to allow operators to monetize OTT video rather than use it purely as a churn reduction exercise.

The first step is for pay-TV providers to build a route to take video to tablets, at least in the home, but then they need to think about advertising and other business models. Motorola’s most recent IPTV acquisitions, then, are not really about winning classic IPTV implementations, but about supporting these new OTT and hybrid systems. Secure Media was one of the cheapest software-only DRMs on the market and was accepted by Hollywood; BitBand represents a way of placing video appliances on the edge of telco networks so that they don’t use up precious core bandwidth; and Dreampark offers the software to manage the process in the middle of the network and the UI on the playing device. Meanwhile, the new social element points the way towards future revenue streams.

Video to Tablets

These moves by Motorola, Verizon and others do indicate how quickly the market is moving towards mobile and “appified“ video, a process that tablets are accelerating, according to cableco Comcast. The firm’s VP of video services, Richard Buchanan, told the NAB (National Association of Broadcasters) 2011 conference that business models have to evolve swiftly. “Consumers want to be able to find, record and interact with friends around content,“ he said.

Comcast has recently launched a video service for the iPad, and under its Xfinity brand, it has launched an application that allows customers to record cable content with a smartphone app and port that content to any screen. This is restricted to on-demand content where Comcast owns the rights, but Time Warner Cable has gone a step further with an app that is also heavily geared to the iPad. Its app allows users to port content to different screens, but TWC has come under legal fire from companies claiming it does not have the rights to distribute some of its content in these new ways.

In this way, TWC paid a price for being the first US pay-TV operator to deliver multiple live TV channels over the iPad, and it quickly had to drop 12 channels from its original lineup of 33. It angered broadcasters, who are particularly concerned that iPad viewing is not currently tracked by the Nielsen ratings service, essential to their story for advertisers. But TWC argues that its iPad service falls under its existing agreements with the TV channels.

Cablevision, with its Optimum Live TV app for the iPad, takes a less contentious approach. It offers a huge amount of content (300 channels and 2,000 VoD titles), but this is not delivered over the open Internet. Instead it comes into the set-top box in the usual way and then reaches the iPad over Wi-Fi so can only be used at home. And the app cannot be combined with Apple’s Airplay in order to watch the content on another screen.

TV-to-tablets will be just another test of how rights protection and piracy laws can work in the digital world. Some, like Time Warner — and Amazon, which short-circuited many potentially difficult negotiations by just going live with its Cloud Drive media service — will launch early and hope that, if the services are sufficiently popular, they will have the upper hand by default in hammering out a deal with broadcasters and content publishers.

Others will be more cautious and adopt workarounds that provide a similar user experience, even with restrictions, like Cablevision. The danger of being too nervous about legal wrangles is that a provider loses the initiative altogether (like Cablevision’s network DVR, held up for years by lawsuits).

The end goal is clear — to buy a piece of video or media once, store it in the cloud and play it on any screen. The technology to support that is getting sophisticated, the legal and commercial frameworks less so. The content industry is trying to create its own standard digital locker, with the Ultraviolet proposal, but while it debates the exact specifications, Amazon and other disruptive players may be running away with the market.

This article is excerpted from Wireless Watch. If you want the complete report, e-mail paperboy@riderresearch.com and ask for WW398. It’s free.

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HOME NETWORKS

Motorola Brings Better Wi-Fito Pay-TV Services

Motorola Mobility is bringing Wi-Fi that reliably transmits high-quality video over a wider area of the home than previously possible with Wi-Fi. It can be used in place of wireline networks like MoCA, HPNA, HomePlug, Ethernet and the coming G.hn (HomeGrid), according to Motorola. And, no new wires!

Motorola’s New VAP2400 Uses Wi-Fi

Motorola’s new VAP2400 video bridge device uses Wi-Fi to deliver video to multiple STBs in the home such as multi-room DVRs for content sharing.

It’s aimed at the pay-TV service providers who want a low-cost, easy-to-install wireless product.

Motorola’s research shows that more and more people are accessing broadcast video services on multiple screens around the home, according to Keith Kelley, VP of home devices at Motorola Mobility. He called the VAP2400 a “game-changing technology“ that will shift the way video services are deployed in homes.

Most pay-TV services don’t currently use Wi-Fi to distribute paid content in the home because:

– It doesn’t have the guaranteed quality of service (QoS) they need for flicker-free video.

– It doesn’t have the width to carry multiple channels of HD simultaneously.

– Its range doesn’t completely cover most homes. There are too many “not-hot spots“ that a single Wi-Fi router doesn’t reach.

The exception is Wireless Ruckus, which has developed a super-charged Wi-Fi that it sells to hospitals, hotels, resorts and the like.

Motorola has a secret sauce for its version of Wi-Fi. The specs for the device include:

– Beamforming 4×4 solution

– Multiple HD and SD streaming at high data rates

– Larger coverage area, supporting multiple concurrent HD streaming through multiple walls

– Low-latency and near-zero packet loss

– Auto-detection and auto-provisioning for self-installs

– TR-069 remote management

It’s expected to be available in the third quarter.

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LEGAL MATTERS

Viacom Sues to Prevent ‘Free Online Lunch’ for Pay-TV Companies

Viacom, probably the largest provider of cable TV channels that run on premium pay-TV services, has sued Time Warner Cable (TWC), the second largest cable operator in the US, to prevent distribution of Viacom’s content to tablets in the home.

TWC has been pushing the TV Everywhere idea for a full two years and is largely thought of as the concept’s inventor. TV Everywhere is simply the idea that content, which is already paid for in a pay-TV service, can be delivered to multiple screens, whether or not that’s in the same home or available on a wider footing over-the-top. Quite simply, if you are a cable TV operator, the important fact is that it goes over your infrastructure, to your clients and is viewed in the same home, which terminates that infrastructure. If you are a consumer that’s not quite what you want.

An Accenture survey, reported on separately in this issue, shows the consumer wants to view their content literally everywhere, not in the same place, or over the same infrastructure over which pay-TV comes.

Consumers are happy knowing that they have paid for the content and can watch it wherever they go, and that includes over the Internet on another TV set, in someone else’s home, as long as the viewer with the password is physically present.

The heart of the dispute between TWC and Viacom is down to a single line of the statement Viacom issued when it filed its legal action. It first said that it was always its habit to negotiate distribution based on specific technologies and devices and added that, “They blatantly grabbed the rights that their competitors have negotiated in good faith to obtain.“

For competitors (read Comcast at the very least and possibly other pay-TV operators such as DirecTV) they appear to have negotiated extra content payments so they are entitled to offer online content to their existing customers. Or have they?

Initially, TV Everywhere will be offered only to the same homes that have contracted with the pay-TV operator. Probably over the same broadband line. This is simply that it is easy to protect when authentication has to identify the DOCSIS line over which it is travelling.

But why would a profit-conscious company like Comcast give away an extra service to consumers, which cost it more money in payments to content owners, if it was getting nothing from the equation? This could bring it a “non-negative,“ churn reduction.

The effects of over-the-top video delivery on pay TV networks is that consumers will eventually, as they come to trust alternative suppliers of online video, switch off pay-TV contracts. If they develop an online video habit with the help of their pay-TV provider, then they will never learn to trust another OTT operator and so will never switch off. So any pay-TV operator that wants to preserve its current margins, and who is prepared to walk away from top content like the Viacom content, as far as its OTT offering is concerned, is committing commercial suicide. Not only does Comcast know and understand this, but so does Viacom and TWC.

TWC hopes to win its court battle seeking a declaratory judgment court ruling to have its iPad App approved to carry the Viacom Networks channels. Viacom in return is suing TWC for breach of contract and copyright violation. If it wins, some less-loved TV channels will allow TWC to take them online, and this may encourage TWC to push ahead without the Viacom channels, and replace them in its OTT bouquet for the time being.

There is no denying that consumers want this kind of application – that’s underlined by the 360,000 downloads of the TWCableTV app, and the 50,000 of the more recently launched Cablevision App.

There is something of an issue here which is purely about tablets and shows how much everyone has invested in the tablet concept. No one sued when TV Everywhere was first mooted, or even when it was delivered to laptops. It’s the fact that it’s being delivered to a new platform that can move around the home, and which can eventually interact with the TV programming – for instance bring up more data about what’s on TV, or use applications which are aware of what’s being shown on your home TVs.

The potential concern is that there is a lot of money on the table and Viacom and its ilk cannot leave it there. If the tablet grows to become the secondary viewing platform of the home and on the road, and it missed the opportunity to cash it, it could be like letting early TVs have movies for free, but charging the cinemas.

There are those who see this as a long game for content businesses, they will go straight to the Internet with their content and bypass network owners like TWC. That’s laughable given their skill set. Viacom knows how to create content and other parts of the business know how to sell adverts. That’s it. There is no knowhow in technology, customer care and service marketing. So these two old dinosaurs are tied together at the hip. Either both will survive or neither will.

This article is extracted from Faultline. To get the complete report, email paperboy@riderresearch.com and ask for FL396. It’s free.

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US Publishers May Secure $11m from LimeWire

The old P2P platform LimeWire is waiting on the bill from its lost legal battle with the labels, but it may have already had to shell out the cash for US publishers.

According to multiple reports, LimeWire and the publishers reached an $11 million settlement — a lot of money for LimeWire though not nearly as much as the labels are seeking.

National Music Publishers Association president David Israelite has said publicly that “I will communicate to you that the amount is well over $10 million [and we have] shown a better than 10-to-1 ratio on every dollar spent on litigation.“

LimeWire has seen the axe, but its leaders and its remaining cash are also facing more potential litigation, so the publishers may have taken the $11 million now to avoid any future tie-ups, such as LimeWire not being able to afford a larger payment down the road.

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This is an archived edition, for the latest copy and a chance to see evaluate current analysis, please write paperboy@riderresearch.com or register for a four week free trial.

 

New Zealand Rushes Anti-Piracy Bill

The New Zealand parliament has passed a Copyright Amendment Bill by a wide margin — the only naysayers were two independent MPs and the Green Party. Like all of the anti-piracy legislation coming from New Zealand, there is controversy surrounding it, but this time the concerns come through how quickly the bill passed through its final stages. The key provision of the bill includes the ability of content and copyright owners to seek court action against repeat infringers and up to a six-month suspension of their broadband accounts. The Copyright Tribunal, which will hear piracy cases, can also fine users up to NZ$15,000. Protests and petitions against the bill are already underway, led largely by active users on Twitter.

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BBC Enforces Syndication Policy

The BBC has begun to enforce rules under its new syndication policy that prevents platforms from creating their own versions of the BBC iPlayer.

The first action was Virgin Media being forced to remove direct access to BBC content via TiVo, being made to replace this with the new BBC-branded Flash service. The contract the two signed makes it so Virgin can’t offer BBC content through an EPG, but must access the content through TiVo’s Apps and Games area.

Virgin customers can continue to press the Red Button from a BBC channel for access. This is true for other STBs, like those running the TV Navigator middleware.

While the new BBC syndication policy hasn’t been approved officially by the BBC Trust, Broadband TV News is reporting that all of the BBC’s actions are within the guidelines of the approved draft policy.

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Motorola, Huawei End Trade Secrets Scuffle

Motorola Solutions and Huawei Technologies have said they will settle a dispute that will allow Nokia Siemens Networks (NSN) to purchase one of Motorola’s business units. Motorola will pay an undisclosed fee to Huawei as part of the settlement that had delayed the $975 million sale.

Under the terms of the agreement Motorola will withdraw its claims against Huawei and will dismiss Huawei as a defendant in a separate trade secrets case. Huawei has agreed to withdraw its lawsuit against Motorola and NSN.

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YouTube Launches Piracy School

Google has launched a YouTube campaign to educate its users on copyright infringement. Part of the campaign also will make its users that receive copyright infringement notifications required to watch a PSA-like video if they want to continue to use the service.

The four-and-a-half minute video, “YouTube Copyright School,“ features the cartoon characters from the popular “Happy Tree Friends“ video series. It explains copyright laws and policy, YouTube’s copyright infringement policies and guidelines, and is actually worth watching — or at least not mind-numbingly boring like most copyright videos.

Starting this week, watching the video will be mandatory if a user receives a valid copyright notification. The user will not only have to watch the video, but they will also have to answer question in a quiz provided afterwards.

“We want to help our users operate within the law and within our guidelines,“ Google senior product counsel Lance Kavanaugh told Mashable. “Requiring that people complete Copyright School after receiving a copyright notification means they’ll understand why their actions were wrong, come away with a better understanding of the law, and be more likely to comply with YouTube’s guidelines in future.“

YouTube has also changed how it treats copyright infringements. YouTube will now give users the ability to dispute claims against them as well as have access to a Copyright Center for questions and concerns about copyrights and content.

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Sony Drops Lawsuit Against PlayStation Hacker

Sony has dropped its lawsuit against George “GeoHot“ Hotz, who the company accused of sharing a code to hack into its PlayStation 3 game console. In return, Hotz will not demonstrate hacking of the PlayStation 3 or other Sony products. If he violates the agreement he will pay $10,000 for each violation.

Sony had accused Hotz of violating the Digital Millennium Copyright Act provision that prohibits circumventing the security on a digital device.

The online hacker group Anonymous began targeting Sony Web sites in connection with the company’s prosecution of Hotz, causing harm not only to its business but also the personal lives of its employees and their families.

The move to drop the suit helps everyone out, but most of all it helps out the children of Sony employees that were being targeted and having their personal information posted on the Web to facilitate abuse and harassment by Anonymous members.

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Netherlands Announces New Piracy Legislation

The Dutch government is planning to change its online piracy laws, but has promised that a three-strike plan is not in the works.

In the country it is only illegal to upload copyright content for online distribution but not to download some for personal use, and that’s being changed. Fred Teeven, the Justice and Security state secretary, said, “downloading has long been illegal for games and other software, and this will now also apply to movies and music.“

However, Teeven added, “Consumers need not fear criminalization [because] there is no so-called ‘three-strikes’ law.“

The new legislation will make it easier to block infringing Web services like The Pirate Bay. While most collections associations have come out in favor of the law, it also requires that those for films and music be more transparent in how much money they collect and how they distribute it.

The Dutch government has also issued a survey of roughly 4,000 musicians, filmmakers, writers and artists to show their opinions on the piracy issue. When asked if they felt piracy hurt them financially: 28% agreed; 23% were neutral; and 29% disagreed. Roughly half said that they agree with the idea that file-sharing “helps to get my work known,“ but when looking at artists under the age 25, this rises to 80%.

On the other hand, 60% of the artists surveyed think the penalties for file-sharers should be harsher. It seems that those hurt by piracy want the pain to be spread around.

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US Cinemas May Boycott Films in VoD Kerfuffle

US movie theaters may choose to not screen some blockbusters by studios that are involved in upcoming premium VoD plans where films are released for $30 shortly after they leave theaters but before they are sold on DVD and Blu-ray.

With films like Warner’s “Harry Potter and the Deathly Hallows: Part 2“ on the chopping block, the threat is either a major bluff or a move that will deal a significant blow to both the studios and the cinema owners.

Four of the six major film studios — Universal, Sony, Warner Bros and Fox — plan to make new releases available to rent online just two months after their theatrical debut. New releases will be available to rent for $30 under the premium VoD plan, which is set to be introduced later this month.

The National Association of Theatre Owners represents the largest cinema chains in the US, including Regal Entertainment Group and AMC Theatres, and said it will fight the move. Regal and Cinemark, which own more than 7,000 theaters, have already scaled back promotions of films made by studios involved in the premium VoD venture.

Sony’s “Just Go with It“, a comedy featuring Adam Sandler, will be one of the first films offered by the new on-demand service, according to Variety.

Paramount opposes the shorter window and may see a benefit from this as its “Transformers 3“ and “Super 8“ go up against the latest “Harry Potter“ and “X-Men“ films.

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LIES, DAMN LIES AND STATISTICS

 

OTT TV Rakes in $1.6b in 2010

Over-the-top (OTT) TV, or online TV or whatever you want to call videos that are professionally produced and delivered over the Net, is booming.

OTT TV brought in $1.6 billion last year, up 34% from 2009, according to IHS. Internet TV advertising was the biggest contributor at $719 million.

Hulu alone said it got more than $200 million in ad revenue in 2010, double what it did in 2009, despite getting only 10% more views. Hulu has a free and a subscription service, both of which run about three ads every half hour.

“Even in this conflicted market, revenue was up, thanks to the proactive attitude of a handful of players, including Hulu and the CW Television Network, which have managed to expand revenue even as consumption growth has leveled out,“ said Dan Cryan, head broadband media analyst at IHS.

Hulu had the most ads viewed in March, 1.2 million according to comScore. It shows 47 ads per viewer per month. The unnamed second place site shows only 14 ads per viewer per month.

The online TV site CW Television Network, partially owned by Time Warner, reportedly grew by 50% in views last year, but its revenue increased 300% to $16.5 million.

Cryan said the results show that TV networks should promote on-air that their shows can be viewed online.

“Consequently, broadcasters in the United States are at risk of ceding territory to Netflix as the go-to destination for television on the Internet,“ Cryan said.

In addition to ad-supported OTT videos, there are subscription services like basic Hulu and Netflix and also pay-per-view like Apple’s iTunes.

What are you watching tonight? Broadcast TV or something on the Net?

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61% of Corporations Have Employees That Use Tablets

It’s amazing how much technology that was originally developed for consumers like Wi-Fi and broadband is being used by the corporates. Lest anyone think tablets aren’t going to be a “next big thing“ in the corporates, a study from Strategy Analytics says:

– 61% of US corporates report employee tablet use.

– Corporates are gearing up to handle tablet use.

They are getting ready by bulking up their internal networks and enterprise infrastructure, according to the company’s report, entitled “Tablet and Touchscreens Strategies.“ It describes the growth in personal devices, Bring-Your-Own-Device (BYOD) work policies, availability of high-speed networks and “an inexorable shift to virtualized and cloud computing environments,“ all of which serve to drive the growth of tablets in the enterprise.

“Trends that include BYOD are evolving from an experimental phase to enterprise ‘norm,’ as smartphones and tablets move into the workplace, each with its own mobile application environment,“ said Andrew Brown, director at Strategy Analytics and report author. “BYOD is driving the need for secure converged fixed mobile access such as 4G, Wi-Fi and Femtocell and integrated IT management.“ He said this may appear to be the IT manager’s nightmare scenario, but improved managed mobile service tools “are bringing these devices under full IT control for the first time.“

Companies are also identifying how to integrate “consumer“ features into the way they manage their own communication, collaboration and interaction,“ said David Kerr, senior VP at Strategy Analytics. “Tablets are increasingly being viewed as a fast and unobtrusive way to enter and access key information, irrespective of location and context,“ he said.

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60% of Online Aussies Simultaneously Watch TV

One screen is not enough down under when watching TV. Two screens are better, according to the Nielsen’s “Australian Online Consumer Report,“ which said that 60% of adults who used the Internet in 2010 said they watched TV while they were online, up from 49% in 2009.

“The Internet is an ideal medium for that media multi-tasking,“ said report co-author Lillian Zrim. “It’s more in the control of the consumer.“

Nearly a third of the two-screen people said they did it everyday and 85% said at least once a week.

In total, 77% said they used the two screens at once, up from 69% in 2009.

Of the two-screen users, 65% said the Net was their main focus; 14% said it was the TV.

The 5,800 Australians aged 16 and over said their Internet usage has increased by four hours over the prior year. The average went from about 17 hours and 36 minutes in 2009 to 21 hours and 42 minutes. Men spent an average of 23 hours per week online; women spent 20.

The survey showed that TV, radio, gaming, newspapers and magazines also increased.

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Who Will Dominate Tablet Market in 2015

Who’s going to dominate the tablet market in four years? You’re right if you said Apple. According to Gartner, Apple will dominate 2015 and own more than half the market at least until 2012.

“Despite mounting competition from other operating systems, Apple’s iOS will continue to own the majority of the worldwide media tablet through 2015,“ the firm said.

It’s the large iPad ecosystem of apps and accessories that will keep the Apple on top. “The richer the ecosystem, the stronger the pull for consumers,“ Gartner said.

Carolina Milanesi, research VP at Gartner, said that many rivals are too focused on hardware to the detriment of “soft“ features like apps, services and the user experience. “Tablets will be much more dependent on the latter than smartphones have been,“ she said, “and the sooner vendors realize that the better chance they have to compete head-to-head with Apple.“

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Our Perspective

From where we at The Online Reporter see the tablet world, the single biggest barriers that iPad competitors have is the operating system. Apple has done an extraordinary job of synching its iOS and the A4 ARM-based processor for maximum speed, power and battery usage plus optimal user interface. Makers of Android tablets can’t do that without creating even more versions of Android than already exist. Apple chief Steve Jobs has said Android’s biggest problem will be the fragmentation of it.

The Linux crowd already considers Android a fork and no longer in the Linux mainstream.

To optimize Android’s user interface, companies like Samsung are being forced to develop their own user interface to sit on top of the tablet-optimized Android Honeycomb, something that has rarely worked in the history of personal computing.

Motorola’s, Samsung’s and others’ use of Android in their tablets will never be able to significantly differentiate their tablets as long as they use the same OS. For example, any app that runs on one will run on all. They will have to try for advantages in hardware, but that is increasingly difficult.

Additionally, they will be forced to accept what Android offers in the way of performance, never able, like Apple, to tweak out the maximum.

We believe these reasons are why HP and RIM have developed their own operating systems. We haven’t seen HP’s but what RIM was showing on its QNX OS at CES was the second-best tablet we’ve seen. Admittedly it was in a controlled environment. The proof will be when RIM and HP start shipping.

Google is expected to appoint some company, probably LG, to make an Android tablet to show what can and should be done.

We also believe it’s the reason Motorola and Samsung have started developing their own operating system although neither has made any promises.

Then there’s Nokia, the largest maker of handsets and which should be a candidate to dominate in tablets. It has totally maneuvered itself out of the tablet market by getting into bed with Microsoft, which has proven to be a failure in smartphones and tablets.

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ONLINE MUSIC SERVICES

Spotify Cuts Down on Free Music and Song Plays

Need a sign Spotify is looking to make more money, more friends in the labels and a more secure platform for a US launch? Just check out the whooping the music streamer has given its free users in Europe.

For its free subscribers, Spotify has announced a new series of restrictions that go into effect six months after they register. At that point, users will be limited to a total of 10 streaming hours of free listening each month, down from the current 20-hour limit. Users will also only be able to play individual tracks a total of five times — ever — before they are greyed out on the service and unplayable.

Spotify lets users share playlists and play those lists from other users, so expect these to become more carefully curated and for free users to stop listening to playlists of the current hits as the new song plays restrictions comes about.

Paying to upgrade to a premium account will remove both restrictions, plus all the regular benefits like better quality streams and mobile apps.

According to Spotify, the new changes will only affect its heaviest free users since the average user won’t likely hit the cap. The average user will also, according to Spotify, only see the play limit applied to 30% of the songs they play.

The company is planning a 30-day free trial of its premium service in May for all users.

“We’ve got to balance a number of priorities,“ said chief content officer Ken Parks. “Chief amongst those priorities is to keep the free service, which is what makes Spotify unique, and what you’re seeing here is a balance of these priorities. We’ve shown that the model is doing extremely well, but as things stand, we need to tweak the service to ensure everyone has access to legal music in the long term.“

There’s no real doubt that all of the changes are coming to get on better terms with rightsholders, either by their demand or as a move to sweeten the service in the eyes of these rightsholders. There has already been a lot of overreaction to the announcement, but only time will tell about the true impact of the restrictions.

For all you free Pandora users out there, how many of you actually hit your monthly streaming-hours limit?

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iTunes Cloud Music Rumors Heat Up

Apple is most definitely, likely, probably or perhaps launching or considering launching a cloud music service for some point in the near or distant future, according to the latest reports.

While the rumor mill can’t decide on anything right now, Apple itself has added some fuel to the fire. The company has an ad for a “Cloud Systems Software Engineer“ to join a small team and build “the future of cloud services at Apple.“

This is likely an expected expansion of MobileMe, which could possibly add in video and music support, but the real news this highlights is Apple’s power in the music market. While Amazon, Carbonite and Google all have cloud services that the industry is well aware of, Apple has generated more buzz this week than those three and most other major services just by posting a job opening.

This is an archived edition, for the latest copy and a chance to see evaluate current analysis, please write paperboy@riderresearch.com or register for a four week free trial.

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Facebook Gets Wicked Interactive Radio

Headphones maker Wicked Audio has expanded its WCKD Radio service to an interactive experience for Facebook. On the social service, WCKD works by allowing artists to upload their music to the station, and then letting the music be played and shared by Facebook users. Bands whose songs receive more than 200 “Likes“ will get 35 pairs of free headphones to give out at concerts, as well as seeing their songs played on Wicked Audio’s main Web site. The interactive radio can be found at http://www.facebook.com/WickedAudio.

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WMG Bidding Proceeds, Dark Cloud Emerges

Warner Music Group (WMG) is taking a gander over the second round of bidders looking to buy it out. According to reports, WMG is pouring over all of its bids, at least ten so far, that value the business at roughly between $2.8 billion and $3.1 billion.

The list of important bidders, both full and partial, features Len Blavatnik, BMG Rights Management (representing Bertelsmann and Kohlberg Kravis Roberts), Live Nation, Ron Perelman, Platinum Equity, Sony and a host of over labels, individuals and equity firms.

One dark cloud for WMG appeared this week, however, as Cisco announced the closing of its Eos hosted software platform. WMG was the first major announced client signed on for the service. WMG looked to the platform to design and build Web sites for its key artists and properties.

Cisco said that is “still evaluating the specific course of action for Eos,“ but the company’s Dan Scheinman confirmed the closure by tweeting that “Eos succeeded technically, but economically we were still 2 years off.“

The worry here is what will WMG do next? Reports indicate that there’s no backup plan for these artist sites, so WMG has no immediate option. The future sees either these sites dropping off the map in one fell and painful swoop, or a few years of slowly dragging these sites to other platforms.

Billboard pointed out that WMG could end up with some Eos tech, however, since it and Cisco worked closely during the Eos development.

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Nielsen: Streams Beating Downloads

In Nielsen’s latest music look, it found that 17% of those surveyed have paid to download music, while 26% stream music. Based on a survey conducted for Midem in September, the researcher said that there are less people aware of streaming music and willing to use them than people aware of these services but not interested in them. Only 22% that used a streaming service in the last three months said they’d be willing to pay for it; however, 57% said an ad-supported streaming music service is appealing.

“No single monetizable online consumption channel is being used by over 60% of the global online audience,“ the company wrote. “Consumption habits are diverse. This hyper-fragmentation poses a significant challenge for identifying where demand is, which is essential for best capitalizing upon the broad opportunities presented by the new ecosystem.“

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Myspace Finances Need a New Word for Low

News Corp is trying to offload Myspace and the latest reason is the projected $165 million loss for fiscal 2011, which ends on June 30. The number comes from a pitch book sent to potential suitors, which has made its way to TechCrunch. Myspace is only projected to have revenue of $109 million while spending $274 million. According to the pitch book, 2012 is projected to be worse with only $84 million in revenues, but expenses will fall to $69 million. There’s no reason for the big decline, but perhaps burying a service is cheaper than CPR. Unfortunately, the pitch book doesn’t make a clear point about why someone should buy Myspace, unless they just want the name and plan a full revamp.

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YouTube Gets TV On The Radio Film

The US group TV On The Radio has released its latest album “Nine Types of Light“ and accompanied the launch with an hour-long film published on YouTube. “‘Nine Types of Light’ is as much an album as it is a movie by TV On The Radio,“ the band told Mashable. “The movie is meant to be a visual re-imagining of the record, and includes a music video for every song on the album.“ The YouTube movie has just over 57,000 views since its release last week and is an interesting approach to content that is usually bundled with a more expensive version of an album, such as the iTunes LP initiative — which has been somewhat replaced by apps. See the full film at http://www.youtube.com/watch?v=8B5GP0AiQMc.

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Google Music May Drop Streams

Dealing with the major labels can often be a pain, and it may just be a headache Google isn’t willing to deal with.

Music Ally, citing multiple sources, has said that Google will likely ditch the features of its cloud locker service that would have required licenses from rightsholders.

Google, according to the publication, will go to a system that is more of a pure locker storage platform, akin to Amazon’s recent service.

The two big reasons for the shift are allegedly:

1. Frustration with the labels during negotiations where Google felt like it was being strung along.

2. Google’s recent shift to a more engineering-centric executive team, headed by new CEO Larry Page, is somewhat at odds with its licensing team.

Google Music turning into a Google Cloud would be a big upset for the labels, which need to embrace someone as ubiquitous as Google if their digital future is to be secured.

Losing Amazon, Google and possibly Apple will damage the labels, and never getting Spotify off the ground in the US will hurt them even more.

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Amazon to Labels: Calm Down, Our Lockers Sell Music

While rightsholders have come at Amazon with some righteous fury, the digital retail giant has pushed back by saying that the existence of its unlicensed service will be good for business.

Amazon’s music group has sent a letter to labels that says the launch of the cloud service has boosted sales on the Amazon MP3 Store, though no figures were given. The letter even admitted that coming extra features, such as serving customers with a single copy of a song for multiple locations, will require a license when they launch.

“There has also been speculation that we are looking for licenses for (the launch versions) Cloud Drive and Cloud Player. We are not looking for licenses for Cloud Drive or Cloud Player as they exist today — as no licenses are required,“ said Amazon’s letter. “Cloud Player is a media management and playback application not unlike Windows Media Player and any number of other media management applications that let customers manage and play their music. It requires a license from content owners no more than those applications do. It really is that simple.“

The courts will likely have the final say, especially since Amazon faces a little more scrutiny than other media players since it also sells music and has agreements and licenses that cover that side of its business. All of these will have to be looked at since Cloud Player gives users incentives for buying content from Amazon MP3.

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Sprint Launches Music Plus

US cellco Sprint has launched Sprint Music Plus, a new cross-platform music service that combines full tracks with albums, ringtones and ringback songs.

RealNetworks is running the service and has added in playlist creation, music recommendations and even product bundles to the app. Music Plus will initially launch for Android devices, but BlackBerry support will follow in May. Feature phone support is also expected in May.

DRM-free full tracks range from $0.69 to $1.29 per song and charges will be applied to a user’s phone bill.

One of the features that will be new to most users of the service is the ability to assign ringback tunes to different times of the day, as well as for different callers or call groups.

Sprint says the new service will sit alongside other music apps instead of trying to replace them.

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SHOW TIME

Vudu Streams Movies to PC’s Browser

Movies and TV shows from Walmart’s Vudu online video service can now be seen within a browser in Adobe Flash in standard definition format. The move makes the service available on PCs, Android tablets (but not the iPad) and Google TVs. Viewers do not need a smart TV, smart TV adapter or Blu-ray player with Vudu embedded.

Smartphones are not supported, at least not yet.

Most smart TVs do not have a browser, so smart TVs that are widget-based will not be able to use a browser watch unless the Vudu widget is embedded.

Vudu is the un-Netflix and fits in the same sales and rental category as iTunes. Vudu is not a subscription service like Netflix and Hulu Plus. Netflix allows viewers to watch movies, including in HD, within a browser and on smartphones like the iPhone, Internet-connected TVs and the PlayStation 3.

Vudu has more than 17,000 titles, many of which are new releases from major studios. It says it has more movies in HD than any other online service.

It has the clout of Walmart, the retail giant that is perhaps the world’s largest seller of movie and TV show DVDs. It promotes that it gets many films the day they first become available on DVD, not seven days later like the physical DVD offered by Netflix or up to seven years later for the streaming option.

Rentals are for 24 hours. For SD they rent for $3.99 or $4.99 and sell for $14.95. Movies in HDX format rent for $5.99 and sell for $19.95.

The company uses a format called HDX that is true 1080p HD with Dolby Digital Plus 5.1 surround sound. However, the HDX format is not available for the browser version. Films that are purchased in the HDX format can be viewed in standard definition in a browser. Having purchased or rented a film, the consumer can view it on any Vudu-capable device.

The Vudu widget is on a large range of devices from Sony, LG, Samsung, Panasonic and Boxee.

“Customers will be able to enjoy movies instantly and easily at Vudu.com with no additional hardware or software download required,“ Edward Lichty, general manager of Vudu, said. “This launch is part of our overall commitment to provide the Vudu service through as many points of access as possible, offering our customer the latest movies at the highest available streaming quality wherever they choose to watch.“

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DirecTV Offers Online Access to HBO and Cinemax

It’s only a matter of time until the pay-TV companies give their subscribers online access to all the content they pay for. At least that’s what DirecTV, Time Warner and many others think.

DirecTV’s subscribers to Time Warner’s HBO and Cinemax can now access those networks’ content online at the HBO GO and MAX GO Web portals. The two have more than 1,800 titles and offer instant access to current and prior shows and movies including “Game of Thrones,“ “Boardwalk Empire“ and “True Blood.“ They can also watch original films, miniseries, sports, documentaries and features from Warner Bros, Twentieth Century Fox and Universal Pictures.

The company promised apps for iOS and Android products “later this year.“

“The addition of HBO GO and MAX GO is the next step in bringing quality video content to our customers anytime, anywhere,“ said Derek Chang, executive VP of DirecTV’s content strategy and development. “Giving our customers the opportunity to experience their favorite programming, no matter where they are, truly enhances their overall viewing experience and helps them get the most out of the content they subscribe to.“

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Sky Deutschland Offers Online Access to Sports & Movies

The News Corp-controlled German satco Sky Deutschland is making its sports and movies available on mobile phones, iPad and PCs with a program called “Sky Go.“ Subscribers will pay an additional €12 ($17) per month for the service.

The company said it’s the first time a pay-TV service content provider has created a “seamless“ flat-fee service for all devices.

The company said it will “massively“ expand the program to other devices this year including smart TVs, Android devices and gaming consoles.

“We think it is the way television will be consumed over the next 10 to 20 years,“ CEO Brian Sullivan told Bloomberg.

With 2.65 million subscribers, Sky Deutschland trails the cableco Kabel Deutschland, which has 8.8 million.

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SMART TV

Motorola’s Social Companion Keeps Subscribers Stuck to Pay-TV and Tablet/Smartphone

The use of social networking, especially with friends, while watching the tube has become increasingly popular because of the spread of smartphones and tablets. Motorola’s new SocialTV Companion Service runs on devices like those, which consumers simultaneously and frequently use when watching TV, as we reported last week in “Motorola Combines Social Networking and TV Viewing.“

SocialTV Companion Service came about because of the convergence of a perfect storm in the industry, according to Chris Wright, with Motorola’s converged experiences software product marketing team. The storm that emerged in the last year consists of:

1. The soaring popularity of companion devices like the iPad and Motorola’s Xoom. Many consumers are using them in the living room while watching the boob tube.

2. The prominence of social networks like Facebook, Twitter and chats. The FOMA (fear of missing out) has struck young and old and keeps them glued to the screen of their computing devices, tablets and smartphones.

3. The convergence of technology that lets social networking and content to be connected.

Motorola’s current SocialTV Companion runs entirely on companion devices. It is not currently linked or interactive with what’s on TV although that is an option if the pay-TV services are interested.

The cloud-based software supports HTML5, meaning it works on any device with an HTML5-compliant Internet browser. That includes iPad and iPhone, which do not support Adobe’s Flash. Motorola has affinity for its Motorola Xoom, of course.

Motorola’s SocialTV Companion Service is aimed at content providers such as the studios and networks and at the pay-TV service providers.

1. It allows pay-TV companies to compete with the threat from OTT video services such as Netflix by increasing stickiness. Pay TV subscribers could also operate their DVR because it knows what’s on and could offer interactivity. By tapping into the booming popularity of social networking, they are more likely to retain subscribers. The pay-TV services can offer their own version of the Social Companion, one that’s customized to their needs. The user would follow a TV channel such as ABC or the BBC.

2. Content providers can offer the app as a private branded portal, one they can bring the cast and crew to for direct chats. They can also integrate the SocialTV Companion with existing apps like Facebook. If someone has, for example, 130 Facebook friends, all 130, subject to filtering, can see and chat about what they’re watching.

There are reportedly two layers to the Social Companion service:

1. A baseline service that lets viewers see all Tweets related to a particular show as well as a live feed of real-time comments with their social community. It also provides show-specific featured product promotions, a built-in loyalty program, related online web video clips and optional advertising services plus standardized real-time experiences that let viewers express how they feel about the show they are watching and see the combined results for the larger community.

2. If the content producer is involved, then viewers may have access to additional premium interactive content or services, such as interacting with the cast and crew that could be chatting or participating in real-time show-specific trivia quizzes or voter surveys.

Both the pay-TV service and the content producer can offer extras like games, show-related merchandise, extra video feeds, DVDs and promote other shows.

Motorola says it’s ready to take orders and it can do an implementation in about eight weeks. Verizon is believed to have signed up for its FiOS TV service. So far, Motorola said, no one has said no to the concept.

In the future, Motorola said it could also stream live TV to a companion device, in full-screen or in a partial one, with social networking showing in a Window.

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Advertising Brings Revenue for First Time to TV Set Makers

– Rovi Field Testing Ads with Samsung TVs

Rovi has begun a field trial of new Samsung smart TVs that use Rovi’s Advertising Network to show ads to over 30 million North American households. The households have Rovi’s electronic program guides (EPG) that pay-TV services use, CE devices with interfaces for Rovi’s ads and Rovi’s two Web sites, as we reported last week in “Rovi Brings Advertising to Smart TVs.“

An interview with Rovi’s senior VP of advertising, Jeff Siegel, provided additional details.

Most TV makers don’t have any contact with their customers except when they need support. With the new generation of smart TVs and the Internet-based services they can offer, TV makers will now have a continuing touch point with consumers.

Samsung uses its own Smart Hub menus, user interface and EPG. Rovi sells and feeds it the ads. The TV set maker gets an unspecified cut of the advertising revenue.

Rovi Feeds Ads to Samsung’s Interface

Samsung TV’s default user guide shows the videos and apps the customer can access: the EPG, schedule manager, locally stored content, OTT services and a bevy of apps like Yahoo’s for OTT services like Netflix and Hulu. Rovi provides services and data to Smart Hub, such as advertising, recommendations and search to it.

It is an opportunity for TV manufacturers for the first time to get recurring revenue from their devices.

If the manufacturer wants to add guidance or a recommendation engine to their smart TVs they could license that from Rovi.

Rovi already licenses its EPG data and technology to most pay-TV services and to many TV set makers.

Rovi said its ad platform is easy for TV set makers to implement and update.

Rovi will focus on getting its ad platform on TV sets with 42-inch and larger screens by 2012. It expects soon to announce additional TV makers that will implement its ad platform.

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DIGIGRAMS

New Kindle to Come with Ads

Amazon will begin selling a version of its Kindle e-book reader that costs $114 and shows paid product advertisements and promotions.

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ZTE May Make Phone with Intel’s Atom Processor

China’s ZTE, the world’s eighth largest cell phone maker with less than 2% market share, may use Intel’s Atom processor in smartphones, according to Bloomberg. No cell phones currently use Intel processors but Intel chief Paul Otellini has promised there would be some by year-end. Most use ARM-designed processors, including Nokia, which recently reduced its joint efforts with Intel on the MeeGo OS to sign a deal for Microsoft’s Windows Phone 7 that uses ARM processors.

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Nokia to Launch 2 New Symbian Phones

Nokia has launched two new smartphones. No, they don’t run Microsoft’s Windows Phone 7. They use the Symbian OS that Nokia practically obsoleted when it signed a long-term contract with Microsoft and began laying off upwards of 6,000 employees, according to its trade union and losing Symbian developers. Nokia has said its Windows Phone 7 phones won’t start shipping until 2012. Competitors like Apple, RIM and makers of Android smartphones must think they’re shooting fish in a barrel. Nokia is persevering. It said it expects to sell around 150 million Symbian handsets, mostly in the middle- and lower-tier market segments.

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Univision Offers App for iPhone & iPod

Univision has launched a free and customizable app for the iPhone and iPod. It includes video clips, photos and articles of national and local news as well as celebrity gossip plus special events and shows such as “Despierta America“ (Wake Up America), “El Gordo y la Flaca“ (The Scoop and the Skinny), “Republica Deportiva“ (Sports Nation), “Noticiero Univision“ (Univision News), “Nuestra Belleza Latina“ (Our Latin Beauty). There are also updates from sports such as soccer and boxing. Univision App users can sync their social networks to share articles, photos and videos via e-mail and SMS as well as post to Twitter and Facebook.

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UBS: 350,000 Android Activations Per Day

Google is now activating about 350,000 Android devices daily, up from 300,000 several months ago and roughly 60,000 a year ago, according to Brian Pitz, executive director and a senior research analyst at UBS. He said Google serves over two billion ad impressions a day to mobile devices and is getting over $1 billion in revenue from mobile alone.

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How the Mighty Are Falling in Value

The little-known Taiwanese handset maker HTC has surpassed Nokia in total stock market valuation.

 

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Virgin Media to Offer Cisco-Made 500GB TiVo STB

Virgin Media will introduce a Cisco-made 500GB TiVo STB in mid-May, according to Broadband TV News. Its first TiVo box had 1TB of data and Virgin Media has not said how many it has shipped. It’ll reportedly have three tuners for cable content and also take IP-delivered content. The 500GB box will go for £49.95. The 1TB box sells for £149.95. Either option increases the subscriber’s monthly bill.

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Blinkx Buys Burst Media for Its 130m Users

Blinkx has never been fast to create a business model for what it does, according to Faultline, but has now bought ad network Burst Media. Blinkx says it can now deliver the 35 million hours of video that it has indexed into a video search engine to Burst’s 130 million unique users. Blinkx will pay $30 million for Burst and will now create contextually relevant video channels for Burst’s network of publishers, effectively aggregating its online video audience for existing US advertisers. The company says that the move will give it video channels that will rival the scale of television networks.

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Cisco’s Sales of STBs Decline 15% in 2010

Cisco’s closure of its Flip portable camera division has been reported much more than sales of its set-top boxes for pay-TV being down 15% to $1.6 billion in 2010. Cisco said sales at the division that was once Scientific-Atlanta “continued to be challenged.“ It paid $6.9 billion for Scientific-Atlanta, Cisco’s largest ever acquisition.

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Rock & Roll Hall of Fame Launches iOS App

The US Rock & Roll Hall of Fame has a new iOS app. It costs $1.99 and lets the user sample 600 songs from the last century of music, also giving information about the tracks and artists. Unfortunately, they’re not full songs, just samples of music from across the years that link to iTunes if a user wants to purchase any song directly. This is the same model being used by UMG and the Official Charts Company in the UK.

 

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YouTube UK Antes Up £441k for Content

YouTube in the UK is putting up £441,000 ($725,000) in a NextUp fund that will allow up to 25 people to win a £17,700 ($29,000) grant each to develop videos for YouTube and attend a “creator camp“ that will provide training in production techniques. It invited singers, dancers, actors, producers, musicians and makeup artists to participate. YouTube said its UK partners had a 45% increase in uploads since 2010 and that 154% of revenues from partner channels have been given back to creators.

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Maine School Buys iPad 2 for Each Kindergartner

A Maine school district is spending about $200,000 to buy Apple iPad 2s and interactive educational apps for each of its 300 kindergartners. “It’s a revolution in education,“ said Auburn School Department Superintendent Tom Morrill in a report from the Associated Press.

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