Month: November 2004

Europeans Devote 20% of Media Activity to the Internet

There has been a rise in the amount of time people spend online, with the Internet now accounting for 20% of Europeans’ media consumption, according to research commissioned by the European Interactive Advertising Association (EIAA).

The Internet now represents 20% of European’s media consumption, above magazines (8%) and newspapers (11%) but below radio (30%) and TV (35%), according to the research.

The study was undertaken via phone interviews with 7,000 respondents in the UK, Germany, France, Spain, Italy and the Nordic countries between September and October 2004. Five hundred were interviewed in both Belgium and the Netherlands. The study was designed to quantify how people allocate their time across media in Europe and to gauge consumer perceptions of the Internet and the role it plays within their media selection.

The EIAA is a pan-European trade organisation for sellers of interactive media. Members are currently AdLINK Internet Media AG, AOL Europe, LYCOS Europe, MSN International, Tiscali, T-Online International and Yahoo! Europe.

Issues:

According to the survey, the Internet now accounts for 20% of European’s media consumption, up from 10% in December 2003. Almost half of all Europeans are now using the Internet with penetration rates ranging from 74% (Sweden) to 34% (Spain).

At 35%, TV continues to represent the lion’s share of the average European’s media consumption, followed by radio (30%), the Internet (20%), newspapers (11%) and magazines (8%).

Respondents generally perceived the Internet as a more pro-active media. Sixty-one per cent viewed it as a medium to “keep you ahead of the game” and half cited the Internet as their favourite source of information. Seventy per cent rated the Internet as “the best place to get what you want when you want it” and 80% described it as the “best time-efficient medium”.

These results compare with a separate study by the Online Publishers Association (OPA) in New York which showed that, for the first time in the US, content such as information services or entertainment became “the leading online activity as measured by share of time spent online”. Content surpassed other online activities such as communications, commerce and search.

Positions:

“We are witnessing a shift in how consumers are using the Web as broadband households continue to grow. Clearly, it is much more than a tool; it is a primary source of information, entertainment and fun,” said Michael Zimbalist, President of the Online Publishers Association.

“The Internet is now a rival to other media and with ‘always on’ and mobile technologies emerging, we can only expect this trend to continue,” said Michael Kleindl, Chairman of the EIAA.

The number of Dutch broadband connections (cable and ADSL) increased from 2.53 million on 30 June 2004 to 2.85 million on 30 September 2004. The penetration of broadband connections in Dutch households reached 40.4 percent on 30 September 2004 compared to 22.9 percent on 30 September 2003. ADSL increased market share to 54.7 percent and penetration per household to 22.1 percent. Cable continues monthly additions over 100,000, thanks to @home with 49,000 new customers. @home boosted its customer base to 409,000 and passed chello, while Wanadoo saw a seasonal dip in quarterly growth, continuing to stay the largest broadband ISP with 429,000. Het Net doubled net additions to 66,000, passing the 200,000 milestone in Q3 and becoming the fifth largest broadband ISP with 204,000 subscribers, behind chello with 379,600 and Planet Internet with 376,000.

European Interactive Advertising Association

Sky Active re-launches with Significant Upgrade

The Sky Active service, which has been around for the last five years, has this week had a considerable redesign. Originally a text-based approach, the new version is significantly richer and takes is into a magazine style. We spoke to Sky to get the details.

Sky Active Front pageThe opening page (example right) has a video background running on the right and a small number of highlighted options on the left hand side. The layout and links on this page change throughout the day, to match the audience that they think will be looking at it. Currently changing twice it will feature items like horoscopes and lifestyles links during the day and betting and dating in the evening.

Sky Active Content pageAnother way to access the content is via a mosaic layout (example right). This shows a checkerboard of 16 video pieces running on loops. As the viewer uses their remote control to navigate between the videos, bring it in to focus, the audio channel associated with that video loop plays. This short-form video programming is designed to draw people in to the interactive content that lies behind and on pressing the Select key takes them to the content.

It’s clear that Sky is putting more resources (read money) into this service. There is a full time editorial team of ten people working on it on a day-to-day basis and with the video running, considerably more satellite bandwidth is required to run the video. Sixty people across the organisation have been involved with the re-launching of the site – twenty of them within the design team.

Sky Active is creating much of the content in-house, as well as commissioning other pieces externally. The content that is being created is unique to Sky Active.

Clearly Sky is making money from their interactive service, and want to make sure that they are ahead of the game (pun intended) as other rival services are launched.

Sky Active

MPAA to pursue film file-sharers

The Motion Picture Association of America (MPAA) announced it would follow in the footsteps of the recording industry and legally pursue people who swap pirated copies of films over the Internet.

Dan Glickman, head of the MPAA, said legal action would be taken against “hundreds of people” seeking damages of up to $30,000 (~€23,000, ~£16,000) per shared film.

“This was not an easy decision, but it must be done now before illegal online file-sharing of movies spins out of control,” said Glickman. “Illegal movie trafficking represents the greatest threat to the economic basis of movie-making in its 110-year history.”

The crackdown will target individuals who deal in illegally copied cinema products on file-swapping networks, as well as the pirates themselves.

The MPAA claims the US film industry loses more than $3bn (~€2.3Bn, ~£1.6bn) every year in potential global revenue because of piracy. But Glickman said the figure did not take into account the losses from thousands of illegal online downloads that were swapped every day.

The MPAA draws particular attention to the popular file-sharing application, BitTorrent. Written by Bram Cohen, which is designed to offer the files as fragments for faster, easier transfer from peer-to-peer (P2P). One destination website for Bit Torrent fans, Suprnova.org, offers users free downloads of thousands of movies, TV shows, music, software and games files. The site is run on donations and some website advertising.

A parallel initiative sees the MPAA hoping that new software will encourage parents to identify their children as “file-sharing felons”. The software, designed to identify and removal of potentially infringing material and P2P applications on the PC, is part of the MPAA’s war on file sharing and will be released for free by the MPAA at a later date.

Online music file sharing is measured in billions of files downloaded, but the MPAA says that under 150,000 movie titles are traded each day in the US on file sharing services.

MPAA
www.suprnova.org

Ofcom to BT: Equivalence or else

After a long period of deliberation Ofcom, the UK regulator, has come to its conclusion on the Strategic Review of Telecommunications Phase 2 (SRT 2 to those in the know). It won’t be forcing the split of BT Retail and BT Wholesale.

For a very long time, most companies in the UK telecoms market have bemoaned BT Retail getting a better deal from BT Wholesale (they own the network) than they were able to achieve. In the competitor’s eyes, the market hasn’t been balanced. Many felt that BT has been expert in ‘playing’ the regulator, especially Ofcom’s previous rendition, OfTel – only making changes just before they were forced.

In SRT 2 Ofcom investigated three options, Full deregulation; Enterprise Act investigation; BT to deliver real equality of access. They’ve come down on the side of the latter, in their words

“Ofcom calls on BT to provide prompt and clear proposals which will achieve these behavioural changes and bring about the level of confidence required.”

and if equality isn’t achieved, they threaten to use the second; an investigation into the market under the Enterprise Act 2002, with the potential for a subsequent referral to the Competition Commission.

In theory, when equal access to the network is given, the need for Local Loop Unbundling (LLU) to provide competing broadband services will be reduced.

When we spoke to Video Networks, the company behind the London-based IP VOD-services, they said the news today would “not impact their LLU plans”. EasyNet, a significant unbundler, didn’t get back to us before we went to press.

The SRT 2 is now open for public consultation until 3 February 2005.

It would appear that the threats from Christopher Bland, Chair of BT, in the Telegraph at the weekend that “No BT would equal No Broadband” were unnecessary.
Update: OfcomWatch comment

Motorola Moves into Mesh Networking

In a move aimed at boosting its broadband networking, mobile giant Motorola has announced it’s purchasing US-based equipment supplier MeshNetworks.

Acquiring the wireless mesh networking company “brings sales, support and brand recognition that a startup could never match in a million years,” says Rick Rotondo, vice president of marketing for the Maitland, Fla-based company. (We suspect he was exaggerating for effect – commonly called hyperbole).

The purchase by Motorola further legitimises the whole mesh networking concept. Only last month, North American rival Nortel announced its mesh networking product line, aimed at providing easier WiFi coverage without the need for multiple access points. In the UK, LocustWorld has been selling its Mesh AP boxes to hotels, hospitality venues and rural community broadband service providers with a great deal of success.vMesh networking provides an innovative method to build complex data networks very easily. Using the intelligence of each component, meshing helps them to join into a self-organising structure. This approach differs from the traditional “top-down” design of data networks, and provides many benefits, including flexibility, speed and ease of management, making it simply to deploy widespread networks with low overheads. It’s particularly suited to wireless networks, where the connections can’t be predicted in the same way as a wired network, catering for mobile nodes, instant growth and unpredictable variations in reception and coverage.

Mesh networking builds up a wide spread multi-hop network, making connections between neighbouring nodes on demand. Once connected the nodes can explore the network and establish their routes through it, finding the resources that they need automatically.

“The acquisition also represents another step in Motorola’s commitment to deliver seamless mobility to all of our customers,” said Greg Brown, president of Motorola’s CGISS. The purchase will benefit “all of our businesses ranging from mission critical and enterprise markets to automotive and home entertainment applications,” said Brown.
SP Comment: Mesh networks are far from a new idea. Groups such as London-based Informal.org have been enthusiastic about the possibilities of a wireless mesh for a long time. For over three years they have seen the possibilities of a wireless mesh supplimenting the wired networks offering free, ubiquitous access and when combined with VoIP, replacing traditional phone services. When viewed in these terms, it is incredible how long big business takes to catchup with grass roots ideas.

Motorola
MeshNetworks
Informal.org

SBC sign $400m Microsoft IPTV/TVIP Deal

SBC, the largest supplier of DSL connections in the USA, has announced a deal to spend $400m (~€307m, ~£215m) with Microsoft over the next ten years to purchase their Internet Protocol TV (IPTV) software. SBC has been testing Microsoft’s IPTV platform since June 2004 and they now intend to start field trials in mid-2005 and plan commercial availability in late 2005.

The Microsoft product, whose official name is a bit of a mouthful – Microsoft TV IPTV Edition, provides comprehensive security including subscriber and end-to-end digital rights management (DRM), enabling the content to be taken on to the portable devices that support Microsoft’s DRM.

In the first quarter of 2005, construction is due to begin on the SBC “Project Lightspeed”, the company’s initiative to deploy fibre closer to customer locations, providing significant amounts of bandwidth. It is expected to reach 18 million households by the end of 2007.

Microsoft have, of course, had enough opportunity to get TVIP software right. It has been estimated that Microsoft has spent up to $20Bn pursuing their ambitions of being the supplier of choice for TV software for the next-generation of Set Top Boxes (STB’s). We briefly used Microsoft’s TVIP service at IBC this year and found it pretty impressive.

This is the second major TV announcement for Microsoft this month following the Comcast deal.

As the world moves to IP-delivered content, and the source of that content becomes significantly less important, the power that sits with the broadcaster today becomes transferred to the owner/supplier of the box that is used to access the content – the gatekeeper. It is likely that there will normally only be one gatekeeper per household. The race is now on for companies to establish themselves in that role.

SBC
Microsoft IPTV

TAHI (The Application Home Initiative) Conference

The Application Home Initiative (TAHI) aims to accelerate the adoption of networked applications and services by connected home-based users. It is identifying the applications and services that people want and will pay for. Through practical trials, TAHI Members are learning about the business models, logistics, costs and customer benefits that make up the business case for major deployments of a wide range of services and applications. TAHI will show both service providers and the users of services the scope of what the future will bring. It will increase awareness and speed the take up of Broadband. Henley Rowing Museum Henley UK http://www.theapplicationhome.com/Private/Conf1117.html

AtomFilms And CustomFlix: DVD compilation service

When I first used CDuctive in 1998, I was hugely excited. Using a Web browser, you could preview and select music tracks from different artists, pick the order of the tracks, pay for it and have it posted to you. The disks would arrive a short while later with a professionally printed cover, listing the selected tracks. I was so impressed with the idea, I thought the service was worth investing in.

These days the idea doesn’t seem that revolutionary. Indeed it appears a little old-fashioned, having been outdated by music downloads.

Today, AtomFilms and CustomFlix are announcing that they’ve got together to offer the video equivalent – DVD compilations of short films. Using CustomFlix’s Build-Your-Own DVD™ service (isn’t it amazing what you can trade mark these days), purchasers are able to choose up to 10 pieces, initially from a selection of 125 of AtomFilms’ shorts. There are a couple of limits – there cannot be more than a total of 90 minutes of footage onto one DVD and each video clip can be up to a maximum of 30 minutes long. In the same way that CDuctive worked, the disc’s content and packaging reflects the selected films. The disc then arrives in the post.

It’s a good idea, a DVD duplication service combined with a content company, opening the market to those who don’t have sufficient bandwidth to view films online. Posting DVD’s is a very efficient method of bandwidth delivery. 4.7Gb of data transfer costs a lot more than the price of an envelope and a stamp.

They label it a “major step forward in the distribution of on-demand”, which is stretching the concept of on-demand a little – with that logic anything you buy or rent is now on-demand.

After a quick look, it is encouraging to see that it looks like the service is deliverable outside the US. An advantage, I assume, of the contracts signed by AtomFilms for the original material being delivered via the Internet – by definition they are likely to have global distribution rights.

What is not clear is why there are only 125 films initially offered. Is it that Atom doesn’t have rights to physically distribute the other material or perhaps the material isn’t held, or even available in DVD quality?

It’s hardly worth mentioning because it’s too obvious, but clearly when broad-broadband is universal, online distribution will significantly reduce the demand for services like this. We’re not there yet, and clearly many parts of the world are far from close to that, so this service does have the ability to last a while.

There are advantages of buying it on DVD, over the future online delivery methods. The purchaser will own the DVDs content, free to play it on the device of their choosing and it will be DVD resolution, not a version compressed for download. If you go looking for CDuctive, I’m sad to see that it looks like it faded away – but that was six years ago.

CustomFlix
Atomfilms

European Music Rights: Hearing Today – Latest

It’s been clear that retailing Digital Music in Europe has been a lot more complex to organise than in the US. Witness the slower rollout of European music services – EU challenges EU-wide music royalty structure).

The collecting societies will be fighting their corner today at the hearing in Brussels. All involved hope this should go towards clarify the situation.

Failure to fix clear, fair rules for online music licensing has “been the main obstacle in Europe” blocking faster development of online music services, said Lucy Cronin, executive director of the European Digital Media Association. Quoted from the IHT as they covered the build up

Latest News 13:00 update

The run of the events so far. First thing this morning the commission presented its objection and the collecting societies presented their disagreements. This was followed by Q&A session lead by the Commission when one of the issues re-examined was cross board monitoring.

When we asked for an instant reaction to the situation, Lucy Cronin told Digital-Lifestyles “By lunchtime it doesn’t appear that the Commission are being swayed by the collecting societies arguments.”

This afternoon the Interested Parties will have an opportunity to present.

Following this hearing, the wheels of the Commission continue to turn. A report will be circulated for internal consultation. It is expected that it will be a couple of months until the EU ruling will be publicly announced.

European Digital Media Association