Viodi View – April 27th, 2005 Issue – Go to Viodi.com and Viodi.tv for current posts

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Viodi View Newsletter – April 27th, 2005

IP Video @ Supercomm

The Other Kind of IP
Man Bites Dog – The $99 Video Phone
National Show Follow-up
Comcast’s Biggest Competitor?
Will Verizon or Qwest Get ICF?
Telcos Discuss Future at CTA’s Supplier Tech Expo
Mine Those Customers
IP Video Is Everywhere
Local Content Location Survey
The Korner – Maybe I Will Have a Knuckle Sandwich Instead

“I have forgotten more than you know.” When I was in my early twenties, someone used that expression on me. At the time, I wondered how someone could forget things they learned or details of experiences past. As the years pass and my mind is cluttered with the minutia of living, I am beginning to see the truth in that saying. Still, every once in awhile there is an event that jogs the brain and long suppressed memories are reopened.

Speaking of events and memories, Peter Lowten has many from his 25 plus years of going to the National Association of Broadcasters (NAB). Peter has definitely forgotten more than I will ever know about all aspects of video. In the next issue of the Viodi View, he will share his insight as to what he saw at NAB. His views are especially valuable for any independent telco involved with video and cable television. One of his observations from NAB is that independent telcos considering the creation of content need to seriously consider high definition.

The Other Kind of IP

Regarding the creation of local content, the mechanics of creating a story, filming and editing are the passion of most people; this is the fun stuff. Securing and protecting intellectual property may not have the same pizzazz as the creative process, but it is of equal importance. In this issue, we have a brief video interview with Thomas Crowell, Esquire, a producer turned attorney. This interview was part of an hour-plus presentation that he gave to our Local Content Workshop in Minneapolis. Check out this brief video to learn what “Fair Use” means. The video was captured using Packet8’s videophones.

Man Bites Dog…..The $99 Video Phone

I still cannot believe this story was not front page news. Since the last issue of the Viodi View, Packet8 lowered the price of their video phone to $99 with a monthly service charge of $19.99 per month (requires two year service commitment & $1.50 per month regulatory service fee). These have got to be price points that will shift video conferencing from a high-end business application to a host of new vertical applications that, taken as a whole, will represent a mass market.

Anticipating a mass market for the video phone, Viseon, a video phone supplier that is working with Vonage, has been busy partnering with content providers to deliver content directly to their video phones. Delivery of content, whether it be an advertisement, information (e.g. weather alerts) or entertainment, is a logical next step for this market and follows a pattern that is being seen with mobile video. Hopefully, the various players can work together to ensure interoperability between their devices.

National Show Follow-Up

As mentioned in the last issue of the Viodi View, the National Cable Television show offered several signposts that the videophone is real. In the last issue, we focused on some of the technology that was featured at this industry event. In this issue, we focus on the observations surrounding content and programming. This article is only available to Club Viodi members, as there is probably too much gossip and too many pictures for the entire world to see.

Comcast’s Biggest Competitor?

One company that used the National Cable Show as a launching pad for several announcements was Google. Again, I am shocked that their new video content storage and streaming service did not get more press coverage. Sometime last year, Comcast suggested that Google could be their biggest competitor. After seeing what Google is trying to do, I can see why.

Their service, which is still in beta, allows limitless storage and streaming of video on their servers at no charge to the content producer. Additionally, the content producer may charge for the content and keep 70% of the revenue (Google receives the remaining 30%). This is definitely a service to monitor, as it could be big; especially if coupled with a Personal Video Recorder (there have been rumors that both Google and Yahoo are potential TIVO acquirers). Hopefully, I can report on my experience with Google’s service in the next issue.

The Open Media Network, which is powered by the Kontiki Content Distribution Network is an interesting alternative that has just became available. The Kontiki CDN has been around for awhile, works quite well and has characteristics that give it the efficiencies of a Bit Torrent coupled with the rights management required to satisfy content owner’s demands. On the OMN web site, it is suggested that their service, which includes a program guide, will eventually have TIVO support.

It seems like the only thing that could stop these advancements in technology and reduction in costs is the Federal Government. Marty Lafferty of the Digital Computing Industry Association has some interesting commentary on last week’s passage of the House of Representatives’ HR 357, ” The Family Entertainment and Copyright Act of 2005” (FECA). If some of the commentary he cites are correct, a law based on this bill could have a chilling effect on introduction of new technologies.

Will Verizon or Qwest Get ICF?

Another article that did not get much play in the telecom newsletters was the MCI acquisition. No, not that acquisition, but MCI’s acquisition of a company called ICF. This company provides various services for the video post-production industry. This is truly a play into the business of entertainment and could play off the strength of telecom as it uses bandwidth as a substitute for physical means of content distribution in the all phases of content production.

I think I finally get one of the reasons why AT&T and MCI are such hot acquisition targets. At last week’s Calfornia Telephone Association’s Supplier Tech Expo, I ran into an old friend who works for one of those aforementioned long distance companies. He reminded me that AT&T and MCI are much more than long distance service and that their points of presence could be a very valuable asset for RBOCs use to expand beyond their traditional geographic service territory. These points of presence, coupled with technologies, such as WiMAX, are potentially very powerful.

Telcos Discuss Future Requirements at CTA’s Supplier Tech Expo

CTA’s Supplier Tech Expo is a great way to learn about the independent telco market. One of things I like about this convention is that the presentations and the show floor are in the same room. This allows the suppliers, who foot the bill for this event, to hear the insight of the panelists without having to stray too far from their booths.

Chuck Hedelius of Mid-States Engineering, Scott Barber of SureWest Communications, Allan Shearer of Ponderosa Telephone and John Chelonis of Frontier Communications discussed how independent telcos need to position themselves to meet the future. Chelonis pointed out that the future, particularly when it comes to services like HDTV, is closer than ever. The importance of equipment reliability and low power consumption was stressed by Shearer. Barber discussed their approach of, “Area Intensive Marketing”, which includes raising awareness by using tactics, such as mobile billboards, door-to-door sales and working with Welcome Wagon.

Mine Those Customers

Pete Drozdoff of SureWest Communications touched upon similar ideas at the IP Video @ Telecom04 show last October. One of the things he emphasized was the critical nature of Customer Relationship Management (CRM) systems as operators develop a more complex service offering. Along these lines, Midwest Telnet, an independent telco owned datacenter will announce next week that they are providing application hosting services for the CRM product called Goldmine.

For small enterprises, CRM hosting makes a great deal of sense, as it allows the business owner to concentrate on business instead of worrying about supporting databases. This could be an interesting value-add for independent telcos and their ISP offering. Rob Lee, CTO of Midwest Telnet will be discussing their Goldmine CRM solution at next week’s ISP Summit in Charlotte, North Carolina.

IP Video Is Everywhere

I heard Rob speak a few weeks ago at USTA’s Small Company Caucus in Minneapolis. Regarding USTA, we have added several new speakers to the IP Video @ Supercomm conference (Viodi is co-producing with USTA). New speakers include Pierre Costa of SBC, Scott Sandall of D & E, Jeff Maxwell of Telechannel, Jonathan Symonds of ICTV and Steven Newstat of Eagle Broadband. I am looking forward to learning a great deal from these and all of the rest of the speakers.

In the next issue, I will report on the IPTV 2005 conference produced by S2 Data. This conference was unique in that it brought together the entire hardware and software food chain required for telcos to implement IPTV. Some recurring comments from speakers at this conference were the importance of system integration, that telcos no longer have the luxury of delaying their deployment of IPTV and that tools are rapidly being developed that will allow people to easily display their personal content using IPTV set-tops.

Local Content Location Survey

Lastly, the response so far to holding the Local Content Workshop in Oregon during the week of May 23rd has been positive. We are still looking to settle on a specific date. If you are interested in attending, please click this link to complete the survey as to your preferred date. NOTE: If you had problems completing this survey last week, please try again. I forgot to “activate” the survey when I sent it out last week.

The Korner: Maybe I Will Have a Knuckle Sandwich Instead

Last Saturday’s San Jose Mercury headline, which read something like, “Lady Fingered”, brought me back fifteen years when the cable industry was still considered to be run by a bunch of cowboys. The parties these cable cowboys had were, as one would expect, pretty wild. It was at the 1990 Canadian Cable Television Show that I had the good fortune to encounter a crusty old coot named Captain Dick. Captain Dick and his dancing girls were dispatched from Dawson City, Northwest Territories to entertain the cable show attendees.

San Jose, once known as the cow town of the Bay Area, has been in the headlines lately for being the home to a fast food restaurant where a finger was discovered in a bowl of chili. There are suspicions that the finder of this finger may have actually planted it in the said chili in order to extract money from deep corporate pockets (I am starting a rumor that Fingerhut is interested in an unfriendly takeover of this fast food chain). The finger finder did not claim to have bitten the finger.

If she had been associated with Captain Dick and his “Sourtoe Cocktail Club”, maybe things would have been different. See, Captain Dick leads a bar that has a special club membership. This club involves human toes and, generally, alcohol (the adult beverage type). He collects severed toes from frostbite victims, lawnmower accidents, diabetes sufferers, etc. To join the club, one has to have a drink that contains a severed toe. The toe must touch one’s lips in order to join this exclusive club. I actually saw this with my own eyes.

Captain Dick’s web site is a fascinating read and has some good lessons on the art of promotion. Through his promotion, he has built a brand that has become world-renowned. He has even been able to “productize” his brand with an online shop that includes t-shirts, a booklet, and chocolate toes.

When I met Captain Dick way back when I was wimpy and did not join his club. Of course, I was concerned I might get Toe-main poisoning.

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