Distribution

The new digital ways content was becoming distributed

TiVo: Broadband Music Deals; TiVoToGo For Mac; Emmy Award: CES 2007
TiVo has been shipping their PVRs with an Ethernet port since their series 2 model, promising content delivered over broadband.
At CES this week they told the world a bit more about what they’re going to do about it.
TiVo have signed deals with both Music Choice and RealNetworks to deliver music videos and songs to their panting subscriber’s TVs starting “later in 2007.”
The Real Networks deal is self-described as a “first-of-its-kind integration of the Rhapsody digital music service with the TiVo service,” which will give TiVo subscribers access to over 3 million songs on-demand only using their TiVo remote.
TiVoToGo for the Macintosh
TiVoToGo – the Tivo add-on service that lets subscribers burn the content they have on their TiVo to DVD and transfer it to portable devices – is now available on the Mac, a year after it was introduced for the PC.
They achieved this through a joint venture with Roxio, utilizing their Toast 8 Titanium software, letting subscribers transfer programmes either one episode at a time or automatically as soon as the TiVo DVR has recorded them.
The standard charge will be $99, but for a limited period it can be bought through the Roxio site with the bonus of getting a FREE TiVo Glo remote.
Emmy Award
TiVo has had a pretty long path to where they are now, which at times has been a little bumpy, so we imagine there is much happiness when they heard that its Interactive Advertising Platform was presented with the Emmy Award for Outstanding Innovation and Achievement in Advanced Media Technology.
The collective ears of the advertising business must be ringing when TiVo’s CEO, Tom Rogers said, “We have proven that consumers will opt in to an advertising message if relevant and provided the ability to not miss their favorite shows.” The Ads-types will see grasp hold of this, praying that this will lead them out of the valley of (income)-death.
TiVoTVToGo
12 January, 2007
Broadband-Enabled Televisions to Reach 162 Million by 2011
Slotting in nicely with Microsoft’s Xbox/IPTV Announcement (You’ll be able to watch IPTV through your Xbox toward the end of the year), Just the Beginning, says The Diffusion Group.
A surge in the availability of high-quality web-based video content and the proliferation of solutions that network-enabled TVs will usher in a ‘new wave’ of television viewing, one defined less by ‘walled garden’ PayTV operators and more by open access and a variety of highly-specialized niche content.
According to Broadband Video: Redefining the Television Experience, The Diffusion Group’s latest report on IP media, the number of broadband-enabled TVs – those capable of directly or indirectly receiving broadband video content – is expected to exceed 162 million households globally by 2011.
“It is fair to say that the democratization of video delivery is officially underway,” noted Colin Dixon, senior analyst and author of the report. “As the Internet finds its way to the primary home TV – and it will – incumbent PayTV operators and established broadcasters will gradually lose control over the types of video consumers can watch. In the next few years, a growing number of consumers will look to the Internet as means of expanding the variety of content to which they have access, much of which will be available on-demand and specifically suited to their tastes.”
Dixon mentions five factors which in combination are creating a ‘tipping point’ for broadband TV including:
- The widespread adoption of broadband Internet service;
- The expanding variety of video content available on the Internet;
- The introduction and push of solutions intended to enable Internet video viewing on the TV (such as Microsoft’s Xbox/IPTV platform and Apple’s pending iTV adapter);
- The entry of top-tier content producers into the Internet marketplace, many of which are now pushing high-value franchise content onto the web; and
- The move from short-form ‘snack’ Internet video content to full-length TV programming and movies.
- The impact of these trends remains lost on the vast majority of video entities. As Dixon states, “While the subject of Internet video is on everyone’s tongue, very few have a full understanding of how Internet-based video will impact the traditional TV business.”
In many cases, consumers will simply use a proxy to enable an Internet-to-TV connection – that is, instead of having a modem embedded in the TV which connects directly to a broadband service, consumers will use an Internet television adapter, or iTVA, such as a Internet-enabled game console, media-centric PC, digital media adapter, or hybrid set-top box to access web-based video content.
Dixon notes that for those with a broadband Internet connection, it is becoming quite simple to both provide and access Internet-based video on the living room TV. “Not only is it now technologically feasible for most consumers, but economically attractive for content providers.” In other words, the value proposition is both supply- and demand-driven.
As well, the Internet video space is undergoing a shift away from short ‘video snacks’ and toward longer form narrative content more characteristic of TV in terms of production quality, video quality, and length.
Broadband Video: Redefining the Television Experience is TDG’s latest report on the digital home and IP media. In addition to expanding greatly on the themes illuminated in TDG’s free white paper, The Emergence of Broadband Television, the full report explores in detail how many broadband-enabled televisions will actually be connected to the Internet and used to receive broadband video. Further, the report discusses the types of video services that will be launched from the Internet targeting the television and includes specific revenue estimates for these servic es. The report also looks at the barriers to open access to Internet from the television and how these barriers will be overcome.
The Diffusion Group
11 January, 2007
BT Broadband Hits 10m Connections
It may only be a few days after the New Year, but the party poppers and drinks cabinet have been rolled out at Chez BT as the company is poised to rack up its 10 millionth broadband connection this week.

Way back in the distant dial-up days of 2002, BT had set what seemed liked a wildly ambitious target of 5 million connections by the end of 2006, so with the target doubled we reckon there’ll be a fair bit of a-whooping at the top of the BT Tower (and, no doubt, some fattening pay cheques).
The 10 million wholesale connections are split between BT Wholesale and BT Openreach, with 8.7 million customers connecting through BT Wholesale.
The remaining 1.3 million lines are supplied to big names like Carphone Warehouse and BSkyB via BT Openreach.
When the 5 million target was set back in April 2002, less than 150,000 DSL connections existed in the UK, with broadband availability in the UK pegged at just 66 per cent – a figure now standing at a near-complete 99.8 per cent.
Purring with delight, Ben Verwaayen, chief executive of BT Group, claimed that the UK is now the most competitive broadband market in the world, offering customers a choice of over 200 service providers
“That means fantastic choice and value for consumers, and a constant stream of new and innovative applications,” he enthused.
“There are still many, many areas in the market where you can see people really looking for new applications and it’s the applications that drive people to broadband. Look for example at the way people want to make and share their own content, on a narrowband basis that’s almost impossible,” he continued.
“As social networking becomes more and more a thing of today, this presents fantastic opportunities for broadband.”
It wasn’t all backslapping and cigar-puffing at BT though as their rival BSkyB passed the 2 million subscriber milestone, with sales of the Sky+ box increasing by more than 50% last year.
BT
Sky
3 January, 2007
Who Will Win The Camcorder Format War?
More than four in every five camcorders sold in Europe in 2005 recorded footage to digital tape. However, according to a new industry report from Understanding & Solutions (U&S), digital tape will only account for 14% of the European camcorder market by 2010.
“Over the course of 2006 we’ve seen a format war develop between Digital Tape, DVD and Hard Disc Drive (HDD) camcorders,” says Simon Bryant, Business Director of Consumer Electronics at U&S. “Right now, digital tape still accounts for nearly 70% of the European camcorder market, but DVD is gaining ground, and as early as Christmas 2008 shipments will outstrip those of digital tape.”
With most of the leading brands producing DVD camcorders in 2006, the format has proved itself popular across the globe. Prices are now beginning to fall and by 2008 the price will be close to that of digital tape.
“By 2010, DVD will have clearly established itself as the format of choice for mass market consumers, and will account for nearly half of all camcorders shipped,” says Bryant. “This format’s appeal is its ease of use. You can record direct to a DVD and then drop the disc straight into your home player: it makes for a hassle-free workflow system. Couple this with the wide availability of low cost DVD players and you can see its appeal.”
The third competing format – the HDD camcorder – is still a niche product, but has outperformed the expectations of many, performing particularly well in the Japanese market. Though it has a more complex workflow and archiving process when compared with DVD, consumers are becoming familiar with the variety of HDD-based devices within their homes. As the migration of HDD from PCs to MP3 players, set top boxes and games consoles continues, its many benefits will become more widely recognised, making it an attractive alternative to DVD. By 2009, U&S predicts HDD will have overtaken digital tape to become the second most popular choice amongst camcorder purchasers, accounting for 31% of all camcorder shipments in Europe.
In addition, the rise of High Definition Television, with more than 115 million ‘HD-Ready’ homes in Western Europe by 2010, will create further opportunities for the camcorder market. Fuelled by consumer demand for flat panel LCD and plasma TVs, most of which now come HD-Ready, the hunger for HD content won’t be far behind. High Definition DVD players are already available, in either HD-DVD or Blu-ray format, and the next 12 months will see a proliferation of High Definition consumer electronics products. As a result, the camcorder market is forecast to experience a similar revolution, with High Definition devices becoming ever more prevalent. However, initial demand will be low and will ramp up slowly, due to the large price premiums. Longer term, HDD camcorders, with far greater storage capacity than DVD camcorders, will be the preferred choice for memory-hungry High Definition image capture.
In addition to traditional motivations for video capture, there is an upsurge of consumers who capture video to inform, meet and entertain, primarily via the Internet. The growing global interest in social networking sites such as YouTube and MySpace will squeeze the camcorder market, applying pressure through hybrid ‘still-cams’, digital cameras and mobile phones. In particular, the ever-increasing capacity of flash memory will make these devices a serious future competitor to the camcorder.
Due to issues surrounding quality, features and functionality, the short-term impact of convergence on the camcorder market will be minimal; however, moving forward, high-end digital cameras, hybrid ‘still-cams’ and mobile phones will increasingly steal share of the video capture market.
21 December, 2006
The Venice Project: Overview
The rumours of Niklas Zennstrom of Sweden and Janus Friis of Denmark next project have been whirling around for about six months since sold Skype to eBay for $2.6Bn, the two are focusing their talents on TV with The Venice Project.
To date, the pair and their team have had a lot of success in disrupting industries. They’ve had a pop at the music business with Kazaa, the telephone business via Skype and now the television business. Time for the TV world to take note.
This weekend, the Financial Times has picked up on the story, re-igniting the media interest.
The Venice Project (TVP) employed their first programmer on 1 January 2006, so have had nearly a year to get the software to the point where it’s ready to be noticed. The beta release came out on 12 December and since then they have a reported 6,000 on the beta program.
We suspect the FT piece was part of a carefully-managed media campaign, as TVP will need to start attracting the advertisers that will support the content being show for free to the users of TVP.
What does TVP do?
On their blog, the TVP team outline their desires/drivers for the project. The founding idea – TV isn’t good, so it needs fixing.
It’s not Skype TV as some publications have reported.
TVP is headquartered in Leiden in The Netherlands it also has other offices in Toulouse, France; London and New York. Its CEO is Fredrik de Wahl, and it looks like they’ve built up quite a few employees.
The FT are reporting it will carry “near high-definition” programmes, while TVP speak about TV-quality.
We’ve seen some screenshots of the service and, even despite its early beta-stage, it looks pretty slick. The video runs in full screen, with a high quality image being shown. Additional content and EPG features are laid on top, with the video still viewable underneath.
Content for the beta-trial is coming from some pretty big names in the media business including Warner Brothers.
The adverts that are shown on the service, allow it be free. We understand from one of the beta testers that the adverts are not too intrusive and pretty short.
It’s not just the P2P
On a simple level, TVP is software that enables the delivery of video content to individuals using P2P to ease the distribution, while radically reducing the price of getting it out there. Indeed most of the mainstream media are focusing their attention on TVP using P2P.
We think this misses the biggest change the TVP could bring about. Recommendation and tagging of content will make the content findable – one of the biggest headaches when the worlds content is available to a viewer.
Once programmes have been selected to watch, we understand that there will be tools to let people discuss the shows as they are going on – thus bringing a community around the TV shows. There are add on services that offer this, but its inclusion as an integral part of the system will make it second nature to contribute to.
It appears that TVP will avoid the need to apply DRM to the content as “the bits and bytes being collected on your computer are fragments of a stream,” as Fredrik de Wahl, the project’s chief executive told the FT. We can see that there is logic behind this, but doesn’t address the fact that, for the programme to be shown, they need to reside on the machine while they are being shown. In truth, all that needs to be achieved with the technology is to pursue the content owner to put their content on it.
The Venice Project is definitely one to watch. We hope to get on the beta program soon, to give you a more in-depth view and understanding of its impact.
The Venice Project TVP
Images courtesy of Choose Chris
19 December, 2006
Ofcom Proposed Spectrum Auction: Analysis
There’s a fair chunk of spectrum that’s sitting there not being used in the 2GHz band. The various bits are 2500-2690 MHz, 2010-2025 MHz and 2290-2300 MHz.
Ofcom has a duty to ensure spectrum isn’t wasted and as a consequence of the auction will end up driving revenue for the Government. Previously, and famously they did very well when they auctioned the 3G licenses, raising £21bn for the Treasury.
They recently auctioned some GSM spectrum and that only raised £3.8m, but it was much less than the 3G lot with many more restrictions.
Under its new face, and following EU directives, Ofcom likes to offer technology neutral licenses, which means the licensee can use the spectrum for whatever they want – as long as they meet the radio restrictions on that band (power, spectral masks, etc). They hope this will stimulate innovative services which is good for the economy.
There’s a lot of interest in the spectrum, as it could be used for lots of services including 3G and WiMAX, but that’s where the problems start.
Possible European Interference
There are various blocks of spectrum which are coordinated at a European level and each EU country uses the spectrum for the same things. That’s pretty much what happens for GSM and 3G, as well as some TV and radio bands.
It’s all organised by CEPT (European Conference of Postal and Telecommunications) and the Radio Spectrum Committee (RSC), CEPT is represented by 47 countries and the RSC by 25 EU states. They ensure that radio usage is coordinated. Unfortunately radio waves don’t abide by national borders, so it would be no good if one country was using spectrum for say TV and another for radio as they’d interfere with each other.
Though the UK is an island, interference issues are quite common, especially in the south east with France and the north east with the Dutch and even the Nordic countries. The west has to worry about Ireland (and of course Northern Ireland abides by UK policy).
These particular bands are already allocated for 3G, 10MHz in 2010 – 2020 MHz, is already designed for license-exempt self-provided, self-coordinated IMT-2000 use. In the UK none of the 3G networks have actually utilised it, though in other parts of Europe it has been used for this purpose.
2500 – 2690 MHz is currently mainly used for video broadcast systems, all licensees have been given notice to vacate by 31st December 2006. This is a significant amount of spectrum (190MHz) which is greater than is currently allocated to the whole of 3G use (140MHz). It was reserved for a “new” entrant if the current 5th 3G operator failed or for existing 3G expansion.
Ofcom’s suggestions summarised
Ofcom are currently holding UK consultations to see what stakeholders think should happen. They are proposing the following: –
2500-2690 MHz Packaged on the basis of blocks of 5 MHz as lots of paired spectrum (2×5 MHz, 120 MHz duplex spacing) and unpaired spectrum (5 MHz), with the eventual amount of lots in each category to be determined in the auction. The reference point is as per the CEPT band plan: 14 lots of paired channels (14x2x5 MHz with uplink in 2500-2570 MHz and downlink in 2620-2690 MHz) and 9 lots of unpaired channels (9×5 MHz in 2570-2615 MHz).
One guard channel will be necessary at adjacencies between paired and unpaired spectrum, at 2615-2620 MHz, and possibly another in the top part of the band.
There is a possibility to allow paired lots to be converted into the equivalent of two unpaired lots in the event that demand for unpaired lots exceeds that for paired lots at a given lot price.
Each bidder should receive contiguous lots in each category, except potentially one assignment of unpaired spectrum which could need to be split into two blocks of contiguous lots.
2010-2025 MHz Package for award as a single 15 MHz lot.
2290-2302 MHz Package for award as a single 10 MHz lot and retain 2300-2302 MHz for possible inclusion as part of a future award together with 2302-2310 MHz.
What might the response be?
The consultation will close in March 2007 and it’s likely the 3G operators will be extremely vocal in their claim to this spectrum, as they paid so much for their original licenses.
Once Ofcom digest the responses, they’ll then have to argue the case at the European level to ensure it can be licensed off in a technology neutral manner without upsetting our neighbours, however getting agreement from at least 47 countries tends to be a time consuming process.
Luckily CEPT are already discussing the issues and are expecting to make a statement in July next year. RSC will follow shortly after.
Although there’s no guarantee that discussions will go in Ofcom’s favour, they are hoping an award process can start in the Autumn of 2007, though it may well be delayed until 2008.
Potential Cash
With 16 national licenses available, there’s a fair amount of cash the government can expect to raise. Even if Ofcom set the minimum price at £50,000 then that’s £800,000 – they are likely to reach much higher values, although not the silly pricing that the original 3G licenses fetched.
Ofcom
CEPT (European Conference of Postal and Telecommunications)
Radio Spectrum Committee (RSC)
14 December, 2006
More UK Mobile Broadband Possible Via Ofcom Spectrum Auction
Ofcom has released a proposal for the UK’s largest single release of radio spectrum, to be auctioned.
It’s not the auction itself, but a consultation document seeking views on a proposal to auction licences – if that isn’t long-winded enough.
Initially 215MHz of frequency will be made available, with a plan to release 400MHz in total in the ‘next few years.’
Ofcom’s approach is not to dictate what the released frequencies are to be used for, or even the technology that should be used to operate on it. Once auctioned off, they plan to let it be used for whatever the bidder chooses for it.
Their suggested uses include:
* mobile broadband wireless services, offering high-speed, high-capacity mobile data connections using technologies such as WiMAX;
* mobile multimedia services, such as mobile television;
* advanced mobile services using technologies such as UMTS and its evolutions; and
* mobile broadcast, such as wireless cameras for outside broadcasts and temporary or portable video links.
They believe that the spectrum could be released by the end of 2007 although this is subject to on-going EU regulatory discussions. All licences are proposed to be tradable – this is key.
It’s likely that frequencies like this will be bought by a major player, who can then either use it all themselves (unlikely) or re-sell it, as a wholesaler would, to smaller organisations. It’s a pretty radical approach in the world of frequency regulation.
Ed Richards, Chief Executive of Ofcom, said, “Releasing more spectrum to the market will create new opportunities for innovation in wireless technologies, promoting competition and driving convergence.”
Ofcom’s suggestion is to release the spectrum though two separate auctions.
* The bands 2500-2690 MHz, 2010-2025 MHz will be packaged into a number of lots and auctioned together. Participants will be able to bid for multiple lots. The auction will be conducted online using a secure server and there will be a number of rounds to the auction.
* The bands 2290-2300 MHz will be packaged as a single lot and auctioned though a sealed bid process.
Better get started counting your pennies and getting your responses together. You’ve got until 9 March 2007 to get your comments in.
Full details at Award of available spectrum: 2500-2690 MHz, 2010-2025 MHz and 2290-2300 MHz
12 December, 2006
4oD Review: Geo-Blocking Problems
Channel 4 are having problems delivering their 4OD, Geo-restricted content to their UK-based consumers.
Following the launch of 4oD on wednesday, we were really keen to try the service out. It became available a little after the expected mid-day launch, but frankly who’s counting.
We got the software down and were really impressed with the way it looked. Channel 4 really know how to design stuff that looks good and is easy to interact with. Bold use of large graphics and well executed example pieces of video viewable, just my mousing over. A really good job.
We thought we’d initially test out service by using the freely available porgrammes, two of which are given away each week. Plumbing for Trigger Happy, we clicked with some excitement.
Disappointment hit when we found that Channel 4, or at least their geo-sensing service thought we were outside the UK, and therefore refused to deliver the content to us (see image).
Geo-sensing is used by a growing number of Web-based service, as it gives them knowledge of where users are coming from. By looking up the originating IP address, the theory is that they can tell which country you’re in, or in even more detail than that sometimes.
It’s features are all the more important to distributers of content that has a restricted license, like video content. If the content is licensed for UK use, the rights holds want assurance that it can only get to people in the UK.
This is all fine and dandy – if the geo-sensing is correct. We’re with Metronet, now part of Plus.net. They’re a significant player in the ISP game, so much so that BT has made a cash bid for them.
We reported the problem to Channel 4 a couple of hours after launch, providing various pieces of helpful information over a number of emails. We understood that they’d be getting right on to it. While we know that these things take a little time, we pretty surprised that it hasn’t been fixed two days later
We’re sure that other people with different ISP’s are able to view the content, just surprised that companies who are selling geo-sensing service are not correct as to what is in the UK and what’s outside.
We hope that Channel-4 and their geo-sensing provider can get their wrinkles ironed out – they’re missing income here.
Channel 4oD
8 December, 2006
Digital Hollywood Europe:Next Generation P2P: Synopsis: (pt 3/3)
Marty Lafferty, CEO of the Distributed Computing Industry Association (DCIA) concludes his synopsis of the Next Generation P2P sessions at the recent Digital Hollywood Europe conference held in London’s docklands.
Guido Ciburski (pictured right) announced that CyberSky-TV’s streaming video P2P software was declared legal in Germany two months ago, after protracted court proceedings, and that now the questions are how to put it to best commercial use and how to advertise it so that it stays that way. He said the attractiveness of the software is its higher quality online video experience, which takes advantage of higher upload speeds available to broadband users. The US Supreme court decision has been misinterpreted by many, but in the final analysis has not changed much in terms of consumer behavior. P2P usage has continued its steady expansion, notwithstanding market share shifts among applications, basically regardless of related cases and settlements.
Major record labels and movie studios need to take time at this point in their migration to a digital distribution marketplace to listen more to consumers. There has been too little feedback from users factored into digital distribution strategies. There needs to be more interaction with the community of P2P users, and an effort to maximize the satisfaction of consumers with new business models. Going forward, the increase in broadband penetration will drive more growth of P2P, and local storage capabilities and content consumption patterns will change as a function of more speed and capacity.

Dr. Nimrod Koslowski articulated a new vision by stating that content being redistributed via P2P networks can be both controlled and accelerated. Oversi’s patent-pending caching system enables ISPs to monetize P2P and deal with network imbalances arising from the widespread adoption of P2P. It should indeed be experimentation time in this channel. Major content companies can participate at very little risk by putting some of their deeply archived, least monetized, long-tail content into P2P trials. Let material that is not the highest value content travel freely and find new ways to monetize it. There are many new interactive advertising and value-adding layers and payment mechanisms. Experiment and then scale what works.
The Grokster decision should be a clear green light that P2P is legal; inducement to infringe copyright is not. Going after end-users for enforcement purposes is a failed proposition, however. Encouraging content to be redistributed with new forms of monetization will be the winner. We need to get away from proprietary formats and embrace P2P in intuitive ways and couple it with operating systems. The industry needs to relate to the way content actually is being redistributed in terms of developmental priorities and not fight it. Don’t block applications. P2P will become much more integrated into the online environment in the future; not just files, but also acceptable levels of security integrated into our digital-social fabric.
Bruce Benson concluded with his observation that the entertainment industry is indeed evolving to digital distribution – and that such iconoclastic developments as music companies learning to market MP3s rather than DRM’d content may be coming, as well as movie companies adopting new approaches to market their entire libraries online despite legacy sequential-distribution windows. What’s working in P2P is free content. What’s not working is paid content. We need to take a lesson from the video/DVD market, which learned that it could more than makeup with high volume lower-unit-cost transactions (rentals) what it lost from relying exclusively on sales.
FTI Consulting believes it could generate sixty cents per view in ad-supported P2P movies for example. There is the opportunity to put whole libraries to work in this channel. The problems are rights complications, executive bandwidth, etc. – business issues rather than technology issues. Copyright laws are outdated and the US Congress writing tuck ‘n fixes for what has become too complex is no longer going to be effective – copyright laws can’t deal with mash-ups for instance. Rights holders should digitize everything and clear the rights to be able to monetize their works as new P2P models become clarified. We will see the completion of a cable by-pass online, and content elasticity will continue to expand as YouTube has so aptly demonstrated.
Audience questions ranged from how to get tech savvy kids to pay for content to how to convince ISPs that P2P can provide desired quality of service (QoS) levels. Answers confirmed that people will pay for convenience, value, and reliability; and enhanced hybrid P2P systems can do this better than alternatives.
All affected parties need to participate actively in developing a new commerce engine, which is different from just putting up toll-booths. It’s time for more resources to be directed towards creators and innovators. This is a uniquely open environment with the lowest barrier to entry of any channel and enormous possibilities. Share wisely, and take care.
Part one of the coverage – Next Generation P2P: Digital Hollywood Europe.
Part two of the coverage – Next Generation P2P – Digital Hollywood Europe.
Reproduced with permission of the DCIA. For more information, plan to attend the day-long P2P MEDIA SUMMIT NY on February 6, 2007.
8 December, 2006
Next Generation P2P: Digital Hollywood Europe: Synopsis (pt 2/3)
Marty Lafferty, CEO of the Distributed Computing Industry Association (DCIA) gives us a synopsis of the Next Generation P2P sessions at the recent Digital Hollywood Europe conference held in London’s docklands.
Ingjerd Jevnaker (pictured right) distinguished the use of P2P for live streaming as separate from file sharing. P2P essentially means interconnecting users computer-to-computer on the same level, and this can be to share bandwidth as well as content. There should be no contradiction between P2P and protecting content. Because of legacy issues tainting P2P’s image, however, some successful P2P applications don’t advertise that they use P2P – and users don’t care. Meanwhile, other P2P networks have increased their popularity with almost a revolutionary appeal to consumers by emphasizing P2P. The biggest emerging failures are digital services that use DRM in too draconian a manner. Flexibility is needed.

P2P companies now are either going open source and in some ways underground and non-commercial, or working to get consumers to sign onto licensed models. We need to encourage the technology sector to support and advance legitimate uses of P2P on multiple networks; and we need to encourage the entertainment sector to think about alternative business models, such as adopting RawFlow streaming and integrating ad-supported commercial content with user-generated content (UGC). In the coming future, there will be no more TVs – PCs will become the video appliance.
Les Ottolenghi explained how P2P is a superior delivery method for rich media content, with INTENT MediaWorks now delivering 370,000 licensed files per day up from 10K/day a year ago and participating in such groundbreaking efforts as the recent Coca-Cola sponsored Jay-Z P2P-exclusive promotion. INTENT uses DRM to track content, converting the open P2P universe into an ecosystem for legitimate business, which is emerging as primarily ad-supported. Licensed content is provided free, giving instant gratification to end-users, with the result that 84% of discovered files are retained. Unified file-discovery across all P2P and social networks has also emerged as an important attribute for success; hence INTENT has just launched its DelveDown service to provide that functionality.
Fostering the community nature of the channel is also very important, and P2P is uniquely configured for social networking. Post-Grokster, major entertainment companies are showing more interest in working with INTENT and, globally, copyright court cases have reduced the reluctance of majors to move forward and embrace P2P. It is critical not to let telecom firms dictate what happens regarding further innovation by eliminating net neutrality. We also need to work to make files smarter – so that content packages themselves have intelligence – plus continue to improve interoperability and attract higher quality content to be licensed for P2P.
Daniel Harris (pictured right) provided Kendra’s perspective on P2P from its alliance of content owners and software makers. Daniel’s vision is that any application on any device should be able to browse any catalog, and there should be universal interoperability. Record labels have had different ways of managing their catalogs, historically; now we need to show them that with P2P it is possible to aggregate databases and achieve across-the-board content monetization. P2P can bring benefits of non-centralized search and publishing to all sorts of content databases.
P2P can be used for information transfer – not just file transfer. Standardization will help make this a commercially viable consumer medium. It is increasingly futile to pursue legal strategies when open standards are proliferating. Huge advancements could be made in commercial development by simply bolting payment systems onto traditional P2Ps and letting developers earn money by working to make this happen. It is time to embrace, support, and extend P2P with open standards to build a market that has enormous potential. Let’s empower developers to make this succeed with the reality of more open standards.
Trevor Albery cited Warner Bros.’ recent development of new business initiatives in the P2P sphere, while also continuing a strong focus on anti-piracy activities. Examples include licensing BitTorrent and the joint venture announced earlier this year with DCIA Member arvato mobile using its GNAB platform for the In2Movies service in Germany. So far, these approaches have involved offering filmed content in traditional business models, but with a P2P delivery aspect. It is still the very early days for the P2P distribution channel, and now is the time for experimentation in what is a nascent industry in order to learn what will work best.
There should be no apologies for the Grokster case, which was about profiting from inducement to infringe copyright, not about P2P technology. Today’s challenge is to build good services that will excite consumers and compete with unlicensed online content. There may well be more litigation, as the channel continues its legitimization. We need to bring all stakeholders together to make DRM work better so that P2P can safely monetize content. P2P will find its place among distribution channels, while DVDs will continue and other electronic distribution will as well.
Anthony Rose outlined Altnet’s experience from 2001, when, in retrospect, its approach was ahead of its time. Altnet pioneered DRM-protected content distribution through open P2Ps, but major entertainment content rights holders initially resisted. Now that legal settlements are complete, however, Altnet is finally obtaining licenses. Its newest offering, the Global File Registry (GFR), connects people who own content with people who use content. Five years ago, there was much innovation in the P2P space, but then Web 2.0 became more innovative as P2Ps faced litigation. Now we are at a stage where the transport layer for P2P works quite well, but how people use it is still not working as a business. We need renewed innovation here – for example, with better indexing technologies – so that users will not be polarized.
Of concern is the fact that dispute settlements have bi-furcated the development community into those who want licensed distribution and those who are trying to anonymize usage. What should be obvious is that value will be generated by large-volume licensed-content distribution. Social wrapping in P2P is also an area of high potential. Consumers are more empowered than ever and, therefore, trying to dictate their behavior harshly will fail and drive them to the waiting darknets. The desire for control must be tempered; the winning play will be one based on equilibrium. The future will bring an increase in hybrid systems with a mix of centralized and distributed servers.
Part one of the coverage – Next Generation P2P: Digital Hollywood Europe.
Part three of the coverage – Next Generation P2P – Digital Hollywood Europe.
Reproduced with permission of the DCIA. For more information, plan to attend the day-long P2P MEDIA SUMMIT NY on February 6, 2007.
7 December, 2006