July 11, 2011 and counting...

December 30, 2012

Prior posts take us from May 17, 2010 to July 11, 2011. This archive of weekly comment pieces from the  Cue Entertainment web site provides a running commentary on the evolution of video home entertainment, from a UK perspective.

Current posts are behind a subscription pay wall and therefore this blog will always be at least three months out of date. If you want to know more, or better still, sign up for the regular newsletter, visit CueEntertainment.com

USER BEWARE before quoting any statistics or news items from this blog. We live in a rapidly changing world and a lot may have changed since the original appeared online.

Note: For copyright reasons, the images that were used to illustrate these posts are not included here. They can be found on the Cue Entertainment web site.

Who needs Blu-ray? Everyone!

July 11, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

AT&T moved to eliminate uncapped data bundles in the US last year and now the online party is over for Verizon Wireless US subscribers. The firm told its smartphone users last week that unlimited data plans are history. New customers will pay $80 (£50) to stream up to 10GB of content a month. It’s no surprise that all the major operators on this side of the Atlantic have followed suit.

Despite the clear evidence of how much it costs to deliver online entertainment to consumers, however, content owners continue to plan for the demise of DVD and Blu-ray. Promotional videos show happy tablet users enjoying movies on the move with the unspoken message that this is the modern way to watch filmed entertainment.

The home entertainment industry has handed the keys of the supply chain to the telecom operators and received nothing in exchange.

In the current model, the consumer receives a physical disc in return for payment that trickles down to all parties in the supply chain from retailer to distributor and rights owner. In a mobile broadband model, streaming a film that fits on a DVD-5 costs up to £10 and none of that payment accrues to the content owner or publisher.

Still, the message goes out: “Who needs Blu-ray?” Especially since a single dual-layer disc will blow your online data budget for the next five months? But online consumers will blow their monthly GB limits even quicker.

Consider a typical customer with a 10GB limit on mobile data. To access the streaming music service from Spotify for an hour each day consumes 4.5GB of data in a month and kicks a big hole in that 10GB. Internet analyst comScore says the average UK user spent almost 34 hours online in May 2011 and visited 3,079 web pages. Since each page requires around 0.5MB of data to load – a monthly equivalent of 1.5GB – our customer has now used 60% of the allowance.

One standard definition film each week streamed from a digital locker to a laptop in a hotel room, for example, takes our customer to 10.8GB, which is 800MB over the limit before he checks emails or Skypes home. The surcharge for that final hour and a quarter to watch a film he might already own could be as much as 10p per megabyte, leaving a bill for £150. Should he venture outside the UK it would probably be cheaper to book a five-star room and use the Pay Per View service provided by the hotel.

Mobile operators point to wifi as a lower-cost alternative… “Inclusive BT Openzone wifi access,” Vodaphone trumpets in its advertising. But the 1-gigabyte monthly allocation barely covers two editions of “The Apprentice”. There is no escape from the cost of capped data – it is many times more expensive than it costs to ship polycarbonate discs to the home.

The proportion of disposable income handed over to the carrier is money that the consumer will not spend on video entertainment. The £400 or more paid for the latest iPad, Touchpad or PlayBook exceeds greatly the cost of a portable DVD player but the shock comes for most users when their first monthly bill arrives. With a two-year contract to look forward to, there can be only one solution: a cut in the consumption of video entertainment.

Mobile broadband operators are not the only ones who apply data limits. UK fixed broadband providers dot their agreements with talk of “fair usage” and 5GB “caps” and the same is true in Eire and elsewhere in Europe. Much is made of the possibility that Netflix will cross the Atlantic but its venture north of the US border into Canada ran head-on into data limits imposed by that nation’s broadband service providers.

A two-hour high-definition film streamed from Netflix eats up 3.3GB of data and Canadian viewers who watched initially several titles a week found that their broadband bills shot up alarmingly. They paid Netflix $7.99 (£5.20) per month for “unlimited viewing” but their ISP capped consumption at the data equivalent of two films a week, which assumes they do nothing else with their internet connection.

Canadian subscribers may now opt for a reduced quality service that maintains data rates within fixed limits. This response from Netflix should cause enthusiasts for broadband delivery to pause and think because maybe this will boost sales of physical media.

Digital discs have a relatively insignificant distribution cost, which is paid for once at the time of purchase and ensures permanent access to the content thereafter. The physical disc – CD, DVD or Blu-ray – is a token of ownership that plays once or 1,000 times at no additional charge. Even low-cost players offer the highest quality playback, not the compromised, compressed audio and video that broadband delivery usually entails.

Network operators pay a lot for their licence and few people would deny that they are entitled to earn a good return on their substantial investment. Ofcom ensures that current charges reflect the true cost of delivering data to the end user so there is little reason to believe that prices will fall anytime soon. In fact, the cost of constructing the 4G network and of meeting the government’s minimum service obligation is likely to mean data-rate restrictions and even higher charges per gigabyte in the future.

Has the video entertainment business gone crazy? Caught in the cumulative glare of 25 million iPads, the industry has somehow managed to convince itself that the future lies not with the optical disc but with online and wireless delivery of entertainment content. A move to online distribution means abandoning a low-cost supply chain, paid for at point of sale, in favour of a high-cost network paid for by the consumer at point of use.

One far off day when everyone has fibre-to-the-home and per-gigabyte data delivery charges are an insignificant irrelevance, most home entertainment will come that way. 

Until then, broadband delivery is not a financially viable alternative: not for the rights owners and certainly not for the consumer. 

The telephone takes on satellite TV

July 03, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Freeview has brought digital television into almost every home in Britain but the worry is that the digital switchover is too little, too late.

Judged as a replacement for analogue TV, the operation has proved a success, with more channels and more features than ever before. After six years of meticulous planning by the not-for-profit organisation Digital UK, the project is on time and on target for completion next year. Despite the budgeted cost of around £1.5 billion, there has been a creditable under-spend by Digital UK and public service broadcasters. So, well done everybody, now we can sit back and watch TV.

With the end of analogue transmission, however, TV broadcasting on the UHF band becomes an expensive and wasteful way to cover the UK. Daily Mail readers are among many people who have been told they have less than they bargained for. “Viewers with the latest TVs will need to pay £170 for high definition channels,” the newspaper trumpeted last year.

Nagging doubts are whispered for the moment in the background but their insistence increases. They question if terrestrial broadcasting is the best use of resources when large quantities of energy must be pumped into the ether to service a tiny audience. They ponder whether, if we had kept analogue TV on the air and invested in high-speed broadband, we might now be the world leader in connected TV. They suggest that if everyone watches TV via the internet these days anyway, perhaps it should all be transferred onto satellite so the spectrum can be sold to pay off the national debt.

The progress of digital switchover should make such fears irrelevant. Scotland achieved digital nation status in June this year, a full 12 months ahead of England and Northern Ireland, although a year behind Wales. The job is almost done, the argument goes, and when complete will bring dozens of digital channels to every home in the land. It also enables the introduction of new services albeit at a cost that has seen many minority channels fall by the wayside.

So it is not an ideal moment for BT to announce an idea that could make over-the-air delivery of live TV an uneconomic luxury for all but national broadcasters. Instead of programmes received from content providers and distributed to transmitters, as it works now, BT proposes to take live TV all the way to the neighbourhood exchange from where the local ISP can deliver TV to the home over a broadband connection.

The news came unexpectedly in an interview with BT Director of Content Services Simon Orme published in IPTV News at the end of June. He said that TV Connect is a huge project that BT has worked on for some time and described it as “a dedicated television network for online TV”. He added that it is likely to appeal to the Pay TV market as a revenue-generating service for ISPs rather than to free-to-air broadcasters.

Orme said, “The whole local TV marketplace has been in the doldrums for the last few years and the economics have started to look very horrible. The primary broadcasters have started to cut down or withdraw completely from this area, so we think that TV Connect will stimulate new growth within the broadcast industry.”

Not only is the proposal a viable alternative to the scattergun approach of traditional TV broadcasting, but also it should ensure better picture quality for BT Vision subscribers and video services provided by other ISPs. It might even breathe new life into the YouView set-top box. It also pitches the BT network into head-on competition with Virgin Media as a provider of live television programmes.

BT will deliver TV Connect services in time for the London 2012 Olympics and it is a perfect match for the BBC’s requirement to transmit a wide range of sporting events simultaneously. Orme said that the additional traffic generated by the Olympics would not disappear after the event but would stabilise at a significantly higher level.

“Consumers who were not viewing online before will have been educated. You bring into the community a whole load of new consumers, you broaden the base of consumption, so the traffic never goes all the way back down again,” he said.

Think of TV Connect as a service that links broadcasters to each telephone exchange instead of to a transmitter or a cable head-end. From the exchange, each ISP uses conventional broadband lines for the “last mile” to the home. Instead of TV programmes broadcast at full power with no regard for the number of viewers, TV Connect links content providers directly to everyone in their audience and bypasses the internet congestion that affects over-the-top (OTT) delivery or the infrastructure costs associated with IPTV.

Orme said that each “retailer entity” would manage the “look and feel” of its own EPG and the overall user experience. BT manages the enabling delivery technology and effectively provides the resources of a television network operator to the ISPs.

“It is up to each ISP to secure the carriage deals that they want with the broadcaster. If they can secure the appropriate carriage deal then they can come to us and we can enable that service for them,” he said.

In a significant aside, Orme noted that part of the TV Connect thinking anticipates the launch of the YouView box: “Because YouView is a joint venture between the ISP industry and the broadcast industry it is a perfect fit for the TV Connect model.”

BT apparently came up with the idea in 2009 and the company has quietly prepared for the introduction of TV Connect since then. Professional broadcasters, however, have been accustomed to the use of local telephone exchanges to provide landline connections for much longer.

Cable distribution of television content began in 1937 when the Post Office, BT’s forerunner, laid a cable from Hyde Park Corner to the transmitter at Alexandra Palace in North London. In May that year, the link carried pictures of the coronation from three cameras on the route and established the principle of TV distribution over the telephone network. Soon afterwards, the Post Office installed a permanent “balanced television cable” to link Broadcasting House with important sites in central London.

These days, the control room at the BT Tower switches content to and from British TV companies and networks around the world, including the TV transmitters owned and operated in the UK by Arqiva, the BBC and SDN. For BT, it is a short step from there to the distribution of live TV signals to every broadband-enabled exchange in the country.

It is unlikely, however, that the eclipse of terrestrial broadcasting as we know it today will happen any time soon. For many years, the landmark transmission tower at Crystal Palace was the tallest structure in London. Erected in 1956 to replace the original TV mast at Alexandra Palace, it will continue to play an important role in the lives of Londoners when it transmits the full range of digital TV programmes in 2012, as the digital switchover completes its UK tour. It could also become an invaluable element in improving the lives of smartphone users in the city.

Once switchover is completed, the shut down of analogue TV will free some of the spectrum for other services. Ofcom plans to licence the unused radio waves or “white space” that prevented interference between adjacent analogue TV channels.

The UHF TV signals penetrate walls much more easily that the higher frequencies employed by wifi and Bluetooth devices. One part of the “digital dividend” to accrue from the switchover could be the introduction of high-speed wireless broadband networks that use these frequencies. Among other advantages, this could enable enhanced broadband access in rural areas and better mobile access for smartphone users.

With the benefit of hindsight, we should have approached digital switchover from a completely different direction. Now we are almost there, things might not be so bad after all, so long as the benefits of the digital dividend accrue to the shareholders of UK plc.

After all, we (the Brits) paid for it.

This cloud will not be lonely

June 13, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

The wind of change blew through the home entertainment market last week and brought The Cloud with it to cast doubts on the future of the dedicated set-top box (STB).

BSkyB announced Sky Go, an online service that will be free to current Sky customers anywhere in the UK and Ireland. In California earlier in the week, Microsoft, Sony and Apple set out plans that will involve the purchase by consumers of yet more branded hardware and will have a profound effect on how we access content.

The very future of the STB is under threat from some of the biggest names in consumer electronics, as streaming premium video direct to the home via high-speed broadband becomes a viable proposition. When former Asda boss Alan Leighton takes over as Chairman of STB manufacturer Pace later this year, his promised strategic review will need to consider more than supply chain problems and lower margins.

The battle for connected eyeballs between the avatars of connected TV, Xbox and PlayStation could equal any role-playing game in its ferocity. The casualties that ensue could be dramatic, especially for leading STB manufacturers such as Pace, Cisco and Huawei.

The Xbox took centre stage at the Electronic Entertainment Expo (E3) gaming conference in Los Angeles at the start of the month in a presentation that delivered its core message loud and clear: Microsoft wants a bigger slice of the home entertainment market and the Xbox 360 is at the heart of its strategy.

“We are transforming entertainment in the living room by bringing you more entertainment experiences and new ways to enjoy them,” said Xbox Live VP Mark Whitten at E3. He added that long-form content from sources such as the pioneering 4oD service would soon be available on Xbox through YouTube, alongside video from Sky in the UK, Canal+ in France or Hulu Plus and Netflix in the US.

Possibly the most visible threat to the existing ecosystem will be the addition of the Microsoft search engine Bing to the Xbox Live interface. Most observers have scoffed rightly at the idea of using a keyboard to enter search queries into an Electronic Programme Guide (EPG), and Microsoft is not about to challenge this view. Xbox Live adds Kinect voice control to the EPG so that users say simply what they wish to watch, and Bing plays it.

The demonstration at E3 showed how almost every function of the Xbox is accessible by voice commands. “Xbox Bing X-men”, for example, brings up on screen not just games but the “X-Men” films and animated series. Say “Xbox Play X-Men First Class” and the film streams to your screen. “TV on Xbox becomes more amazing when you are the controller,” said Whitten.

The instant and relevant results displayed by Microsoft’s Bing search engine could consign the remote to the place it has traditionally occupied – behind the cushion on the sofa. Xbox Live is now the most powerful STB you can buy – and apparently you can use it to play games as well.

Sony delivered a similar message in Los Angeles. Consumer Products & Services President Kazou Hirai said, “The world of entertainment has undergone a significant change since we launched PlayStation Network (PSN). We can attest to the importance of having that connected experience across all our products; devices that are connected to content and, of course, connected to each other.”

PlayStation 3 has long been the console of choice for users who want the best of all worlds – partly because of the in-built Blu-ray drive, which has helped to build demand in the US to the point where 49% of owners view Blu-ray titles on their PlayStation 3 at least once a month, according to research organisation NPD. Perhaps as the result of the recent difficulties experienced by PSN, the focus at E3 was on delivery of PlayStation content to other devices including Android smart phones and tablets, and especially the PlayStation Portable’s successor, the PlayStation Vita.

“We have created our next generation portable to be one that breaks traditional boundaries of entertainment,” said Hirai, who promised new ways to interact with “your world, your friends and your entertainment.” The PS Vita will use the AT&T network and 23,000 WiFi hotspots in the US to connect to the cloud and to other devices. The focus is on the connected experience using earth-bound wireless services rather than cable and satellite connections that tie the device to an outlet on the wall.

At the Moscone Centre in San Francisco, 400 miles northwest of the E3 venue, Apple CEO Steve Jobs explained the mysteries of iCloud to devotees attending the World Wide Developers Conference (WWDC). “It stores your content and wirelessly pushes it to all your devices,” he said, which might seem a “me-too” idea at first sight but embedded in his remarks were two important ideas that make iCloud stand out from the crowd.

The concept of “pushing” content to the user, rather than “retrieving it” from the cloud is the first thing to note. The second is the idea that your Apple devices are all part of a single ecosystem. Each gives access to all your files wherever you may be without the need for the user to be involved actively in copying files from one device to another.

Most services treat cloud storage as an extra hard drive on the subscriber’s device, somewhere that is secure, stored in a data centre many miles away and available for users to download whenever they wish. Once Apple receives a file at one of the data centres built specifically to support iCloud, it “pushes” it back out to every other Apple device registered in the user’s name. Photos taken on an iPhone in Ibiza, for example, will be accessible almost immediately on an Apple TV back home in Ipswich without any intervention on the part of the user.

To avoid filling local drives, iCloud leaves only the previous 1,000 files on each device although the originals remain available up to the five-gigabyte limit. This push technology is not an original concept but as with most Apple ideas, this time “it just works.”

Then there is Match, a subscription service that matches the music you own that didn’t come from iTunes with tracks from the library of almost 18 million tunes that Apple has already encoded. This avoids the need to spend weeks uploading existing mp3 files to your space in the cloud, since it is probable that Apple already has a high-quality streaming version in its library, ready to play on any device you own. Only the thrash metal tracks laid down by your school chums in 1987, or similarly obscure recordings, will need uploading.

The iTunes Match music service starts later this year in the US, but negotiations with the labels and PRS in the UK could hold the service back here until 2012. There is no technical reason why iTunes Match should not apply to video as well. Is it possible that one day in the future, digital copies of every film ever made will be held at data centres around the world, ready to stream to any (Apple) device that asks for it? If you think not, then be mindful that the music industry thought that way too.

Sky Go is a combination of Sky Player and Sky Mobile TV and from July 6 the service will deliver live linear channels and VOD content to two registered mobile devices per Sky household, free of charge. Existing subscribers will be able to receive Sky News, the five Sky Sports channels and ESPN on their smart phone or tablet at no extra charge. Customers with laptops and other computers have access to more than 30 live channels and “an extensive library of on-demand content” – so far unspecified. Non-Sky customers pay between £15 and £40 monthly for Sky Go and the existing Sky Player services on Xbox and Fetch TV remain unchanged, other than re-branding as Sky.

Sky acquired the public WiFi network known as The Cloud earlier this year and Sky Go will leverage its 4,500 hotspots to ensure widespread access for subscribers. However, any Sky customer connecting through the 3G network will find that although access to Sky Go might be free, substantial data charges will almost certainly apply.

The Sky Go announcement underscores the depth of the challenge that confronts conventional STB manufacturers, which include Amstrad, makers of the Sky+ box. Frankly, with so much intelligence built in to smart phones, tablets and domestic TVs, do we need them any more?

The STB is just an add-on device that connects new services to existing TVs and provides conditional access to premium content from subscription services. The TiVo box made for Virgin Media by Cisco records up to three channels at a time on one terabyte of hard disk storage. It includes the catch-up TV service from BBC iPlayer, a remote control that needs a pilot’s licence to operate and a list price tag of around £200 for new customers, much less for existing subscribers.

Given the imminent arrival of connected online services and delivery of content from the cloud, these boxes seem overpriced and curiously outdated – particularly if you are lucky enough to have a high-speed Virgin Media connection.

The PlayStation 3 sells at about the same price as the TiVo but includes a Blu-ray player. The Xbox 360 is available for around £160. These devices offer considerably less on-board storage than the TiVo or Sky+ boxes but that will hardly matter when content in the cloud becomes more widely available.

Microsoft claims that Xbox 360 gives you “more reasons to stay on the sofa”. They might well be right.

Curing the common code

June 20, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Just as the book business has the International Standard Book Number (ISBN) and retail has the Universal Product Code identification number (UPC) and its associated barcode, the entertainment industry needs a common code to handle the plethora of platforms it now serves, according to Entertainment Identifier Registry (EIDR) head Kip Welch.

Welch is President of the non-profit EIDR and also VP Business Development and Special Projects at the Hollywood studio funded technology lab Motion Picture Laboratories, Inc. (MovieLabs).

He likens the need for EIDR, which serves as a standard identifier with a 27-digit code providing a unique identity for every entertainment product in the digital supply chain, to plumbing.

“Digital distribution is getting to the point where we can no longer afford the manual processing that we currently go through,” he told delegates at the Futuresource Entertainment Summit (FES) in London last week.

“We need to get ourselves organised; to put the plumbing in place that will allow the efficiencies of a computerised system to generate new types of revenue. We have to avoid the mistakes that are slowing the growth of some of the revenue plans that we all talk about so enthusiastically.”

Almost 40 years on from the first time a store scanned the first product — a packet of Wrigley’s Juicy Fruit chewing gum — retailers are completely dependent on the UPC and barcode throughout the supply chain.

“Walk into a retail store, even a ‘Mom and Pop’ store, and everything has a barcode with the product code on it. That assists with inventory control and all the systems that manage those products. They help people to make money and to move money through the system,” said Welch.

Yet, he noted, the film and television industry has struggled with several incompatible numbering systems that make it impossible to track digital assets through the entertainment pipeline.

EIDR, a B2B registry of audiovisual assets that extends from titles at the top level through different versions and encodings to clips and trailers, is designed to solve that problem.

“Give it a number and every one of your service providers and vendors can exploit it, look it up in a centralised service and share all the benefits, which extend to rights management and enhanced metadata services,” Welch explained.

EIDR, which is interoperable with other identifier systems, can be extended easily to cover new and emerging applications.

He compared the EIDR number to international phone calling: “Dial a number in Brazil and the phone company there understands that number; you are put through to the person you want to talk to. Imagine if every time you crossed a national border, you had to translate the number into a regional telephone numbering system before you could get through. That is what we do, to some extent, in digital distribution today.”

EIDR, however, is not simply about identifying film clips for YouTube, though it embraces that need, across multiple languages and technical platforms. It meets the requirements of international television distribution, digital cinema operators, advertisers and rights owners and it coexists with any identifier already in use.

Once a piece of content has an EIDR number, a service provider or supply chain participant can register as a “look-up user” to ask about a title and its related metadata in the registry, just as they would search a telephone directory.

The EIDR identifier remains with the content, regardless of changes in control or ownership of the underlying asset. It contains no information about the actual content, since all the relevant data is stored in a central database. A sophisticated de-duplication system checks that each allocated EIDR code is unique, after which the registration and its associated metadata is recorded in the registry.

The arrival of the digital rights locker — UltraViolet is one example — provides a further impetus for the adoption of EIDR. Digital ownership will involve many different providers delivering the same content to the consumer from different masters and in differing formats.

For example, a film may be sold as a Blu-ray disc, along with the rights to download and stream to the buyer’s connected TV, mobile phone and tablet device. The retailer, streaming provider and download service all play a role in delivering the film to the consumer and each party needs to ensure that they deliver precisely the same content.

“There are few usage restrictions on EIDR. It is meant to oil the wheels of commerce and it doesn’t come with a complicated agreement. You can do pretty much anything you like with it. We want members to help support it and it is not intended to compete with anyone else in the industry: it is there to enable what you are doing,” said Welch.

He acknowledged the need for international agreement to reap the benefits that EIDR could bring and the fact that it is not something that a small group of companies in California can impose.

“We need European support to benefit all of us, so let us know of your interest, particularly if you have ideas for features that we have not yet thought of,” he said.

“A lot of you can use it to help make money and run your business. I’m not here to make money from you, simply to help all of us do a better and more efficient job in digital distribution.”

Welch brings enthusiasm and expertise to the project and he emphasised the collaborative nature of the organisation. The intention is not to generate a profit but to cover the set-up and operating overheads associated with the project. With registration costing between $5,000 (£3,000) and $20,000 (£12,000), rights owners may hold back until they can see the prospects for a quantifiable return on their outlay.

EIDR must confront this dilemma. Unless there is a rapid uptake over the next few months, much of the hard work and investment in digital delivery will go down the drain.

VOD has a bumpy ride in the UK

June 06, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

The Video On Demand (VOD) service SeeSaw will shut down later this month, a victim of legislative interference and consumer indifference. Arqiva, the company that acquired the assets from the wreckage of the joint venture (JV) between BBC Worldwide, ITV and Channel 4, has bowed finally to the inevitable. After two years of intensive care, the erstwhile Project Kangaroo is dead.

The losers are the content owners who have fewer outlets for their rights and the users that have supported SeeSaw over the past 16 months. The winners might be US DVD-by-mail and online streaming service Netflix and advertising-supported VOD service Hulu, which have been knocking on the UK’s door for a while. The demise of SeeSaw might be the cue for one or both of them to enter the British market.

When the Competition Commission inserted the last-but-one nail in the coffin of Project Kangaroo in February 2009, several expert witnesses lined up to testify that there would be “a substantial lessening of competition” if it survived. The list of complainants includes Joost, Babelgum, Virgin Media and News Corporation, which is a major shareholder in Hulu.

Only the Producers Alliance for Cinema and Television (PACT) spoke out against the closure of the JV. In its submission, PACT said, “Prohibition would slow the development of VOD in the UK, lessen consumer choice, undermine the network TV model in the on-demand age and undermine investment in UK content.” The passage of time has shown how right PACT was.

Four months after the Commission published the report that put an end to the JV’s plans, Joost pulled out of the VOD market. Joost CEO Mike Volpi made his excuses and left in July 2009 with the parting words, “In these tough economic times, it has been increasingly challenging to operate as an independent ad-supported online video platform.”

Babelgum, despite its advocacy of the open market and an Italian billionaire backer with deep pockets, provides very little long-form content that would attract a British audience. An advertising-supported site, Babelgum offers a collection of video clips and entertainment unknowns sprinkled with BBC content. The package bears little comparison to YouTube, let alone to a full VOD service. In its submission the company said, “ … prohibition is the only remedy which adequately addresses all our competition concerns and results in the lowest costs to third parties and/or the market”.

Both Joost and Babelgum got what they wanted, although stopping Project Kangaroo in its tracks produced no discernible benefit to their bottom line.

The Commission reported, “We found that there was a wide range of existing and likely future VOD services being offered in the UK. These were all at a relatively early stage, and offered a range of different business models and approaches to pricing, as well as different content aggregation strategies … including VOD services on a download to rent and download to own basis to UK customers through Tescodigital.com in early 2009.” The latter has yet to happen.

Project Kangaroo was ready to roll with a London staff of 50 people and a marketing campaign in place when the Competition Commission closed it down. Arqiva picked up the pieces in August 2009 after the mobile phone operator Orange pulled out of talks to acquire the technology. By that time, public and media attention had turned elsewhere.

Two years after publication of the report, few of its predictions have proved correct and its authors have achieved precisely what they set out to avoid. Competition in the UK VOD market is now substantially lower than it was before the Competition Commissioners became involved.

Despite a spirited attempt to establish SeeSaw as a brand, Arqiva never had adequate funding in place for the premium content acquisition and aggressive marketing campaign required to compete with Virgin Media, Sky Anytime+ and BT Vision. One look at Sky’s boast that it offers “the only VOD service to be rated five stars by the Sunday Times” (a News Corp. newspaper) reveals the power of the forces lined up against SeeSaw.

Inexplicably, the Competition Commission dismisses the potential for overseas content on a VOD service. “We found that familiarity with content was important and that non-UK content that had been broadcast on linear TV in the UK is a closer substitute than other non-UK content. Our assessment of negotiations for the wholesale supply of content also indicated that for VOD viewers, non-UK content was not a good substitute for UK content.” 

Tell that to fans of “The Sopranos” or “The Office” from the US; “The Killing” from Denmark, or “Wallander” from Sweden.

Elsewhere in the report, the Commission says, “Hulu told us that it had held very productive discussions with many of the largest third-party producers in the UK. However, it judged that the content available from these companies was insufficient in total to represent the critical mass needed to launch a successful online offering in the UK.”

Therefore, with Kangaroo out of the way, the companies that objected to its existence could cherry-pick content from JV sources, dominate pricing and ignore third-party content producers. If anything sounds anti-competitive, that does!

With SeeSaw gone too, North American content creators and aggregators must be licking their lips as they eye the potential of the UK market. Last month, the financial analyst Trefis tipped Netflix to make the UK its next port of call and judged that there are 18.7 million broadband households with the potential to subscribe to the service.

In an analysis that the Competition Commission failed to provide, Trefis reports, “The UK market is equivalent to the two most populous US states, California and Texas, combined. The total number of households in the UK stands at a little over 26 million, which is less than 23% of the households in the US. While internet households are around 19.2 million, not all of them are broadband. Thus we are left with about 18.7 million broadband households that can potentially subscribe to a service like that offered by Netflix.” Netflix claims 20 million subscribers currently in its home market.

With the domestic VOD business weakened, the door is open to foreign competition and it seems unlikely that the regulators will intervene to close it. Trefis lists Virgin Media, Blinkbox, Lovefilm/Amazon and BSkyB as potential UK competitors for Netflix. It points out that the relationships that Sky has with Disney, Fox, NBC, Sony and Time Warner will ensure access to profitable content and lead to a contest between Netflix and Sky that is similar to the one Netflix faces with Comcast in the US.

The combined output of the JV companies might be no match for the American production giants but together they would have offered a counterbalance to US content. Although the BBC continues to be successful with its free iPlayer catch-up service, particularly in conjunction with Virgin Media, the direct exploitation of its archives on VOD must await the arrival of YouView.

That service began life in 2008 as Project Canvas, the embryo broadband equivalent of Freeview and Freesat. It has jumped through many hurdles in its short existence but the Office of Fair trading gave it permission to proceed in 2010, unlike Project Kangaroo,

The story since then, however, is depressingly similar to the on-off history of Kangaroo. There once were six partners: the BBC, ITV, BT, Channel 4, Channel 5 and Arqiva. Channel 5 is long gone and the continued support of Arqiva must be in doubt. Boxes should have appeared on retail shelves by Christmas 2010 but then YouView delayed the launch until June 2011. The current prediction is “sometime in 2012”, long after connected TVs will dominate the displays in CE stores and too late to have much impact on the digital switchover.

Constant meddling and changes of technical direction have led some of the best and brightest brains involved in the project to abandon ship. Technicolor announced in May that it is to withdraw as a manufacturing partner for the YouView project, presumably to concentrate its efforts on Hybrid Broadcast Broadband TV (HbbTV), the proposed European standard.

YouView announced a new chairman in March in a bid to sort out the confusion and delay. It will be the Amstrad founder and set-top box tsar Alan Sugar, who sold his company to News Corp’s BSkyB in 2007. His predecessor, Kip Meek, arrived from Ofcom and occupied the position as YouView Chairman for less than seven months. 

With luck, Lord Sugar will have an apprentice ready to fill his vacancy when it occurs.

Shape of things to come

May 31, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Technologists at the Karlsruhe Institute of Technology (KIT) in Germany have set the record for high-speed data transmission fast enough to power 400 million simultaneous phone calls or download 700 DVDs per second. They used a single beam of laser light, split into a spectrum of different colours, to achieve speeds of two and a half times the theoretical limit, processed data a million times faster than ever before and delivered it over a 50 km link.

The data rate achieved by KIT, over what the institute refers to as an “ultra-rapid” connection, is 26,000 billion bits per second. That’s 26 terabits per second (Tbps), which is enough to deliver approximately 1.5 Gbps to every household in the UK.

Such speeds would be a very welcome boon to a range of new online services. The internet struggles currently to keep pace with the demands of broadband video and for some content types operators restrict access to an overloaded network. At the speeds achieved by KIT, network congestion becomes a non-issue and “cost per megabyte” becomes as inconsequential as it is today on hard disk drives.

Media financial analyst SNL Kagan reports that the UK and France lead the deployment of Over The Top (OTT) video, which delivers premium content over the open internet rather than via dedicated cable or IPTV connections. Amazon will need ultra-rapid broadband to meet its European promises for a Video On Demand service from Lovefilm, and Google requires similar capacity to make a success of its feature film rental service on YouTube. With so much content that uses so much data, deployment of terabit broadband networks must come sooner rather than later.

“Multi-platform video continues to gain momentum. New players in Europe, including Lovefilm, are working to align content, distribution, brand and business model into sustainable businesses,” says SNL Kagan Media and Communications Analyst Mohammed Hamza.

The YouView project in the UK and equivalent HbbTV services in France and Germany will increase the demands on bandwidth that began with YouTube and BBC iPlayer. Telecom companies are vocal in their complaint that they have to bear all the costs to expand network capacity while content providers reap the rewards. Their response has been to cap consumer bandwidth and “shape” the traffic in peak hours, to the extent that some broadband subscribers are unable to watch OTT video at the times they want to.

The masts of mobile phone operators are often in remote locations, with a limited electricity supply. The low power requirements of the KIT laser would make it possible to link these masts to a high-speed network and provide wireless broadband to a much wider community. It also opens up the possibility of simultaneous video transmission over the internet to a national audience at a cost equivalent to the distribution of broadcast television.

For the moment, this technology is confined to the research department but it must be the shape of things to come. Fibre optics is a wonderful thing that already replaces copper at many points in the network and makes inroads into the home with plastic optical fibre a safe and practical alternative to WiFi. Shine a flashlight down a glass pipe and most of the light comes out at the other end. Switch the light on and off quickly enough and you have the basis of a signalling system. Increase the brightness with a laser, speed up the flashing and you can connect the world.

The results from KIT show that a single laser with minimal energy consumption can deliver the extremely high bit rates that will be required in the near future. At its best, current technology can deliver 0.1 Tbps. KIT demonstrated an alternative that is 260 times faster and team leader Professor Juerg Leuthold says that this is just the start: “Our result shows that physical limits are not yet exceeded even at these extremely high data rates.”

Prof. Leuthold says that the work of the university is ahead of development elsewhere: “A few years ago these data rates were deemed utopian, even for systems with many lasers and anyway there would not have been any applications. Today, the situation is different.”

To connect the UK has proved rather more dystopian than utopian. A report from broadband analysts Point Topic published earlier this month suggests that delivery of next-generation broadband networks from BT and others (but excluding Virgin Media) has fallen a long way behind. Apart from claims that work on the infrastructure is behind schedule, which BT disputes, where it is available the take-up of superfast (up to 40Mbps) broadband is significantly lower than anticipated.

The forecast for superfast (up to 40Mbps) broadband connections by 2015 is cut by a third from a planned 8.8 million to 6.7 million lines, according to Point Topic Chief Analyst Tim Johnson. The report claims that BT had intended to enable 343 exchanges across the country by December 2010, though in the event, just 182 were completed.

BT counters that the actual number of fibre exchanges enabled by the end of last year was “in excess of 330”, although the company acknowledges that connecting an exchange is not the same as connecting the consumer. BT claims: “We are close to passing five million premises with the technology, rising to 10 million by 2012 and two-thirds of the UK by 2015. We’ve also announced plans to double the headline speed of our main fibre broadband product, from up to 40Mb/s to up to 80Mb/s in 2012.”

Ofcom reports that average download speeds in Britain have increased markedly over the past year as consumers move to faster broadband services. By the end of last year, according to their most recent statistics, 42% of UK broadband connections had a headline speed above 10 Mbps. This compares well with the figure of 24% in May 2010 but in other countries things have moved ahead more rapidly.

Britain languishes currently in 33rd place in the “Household Download Index”, the “real world” league table of international broadband speeds. Broadband test specialists Ookla compiles the data through its Speedtest.net site and uses billions of test results from 170 countries around the world. South Korea tops the chart with an average consumer download speed of 32.5 Mbps while Bolivia is in last place at 0.43 Mbps.

Although Ofcom reports that the UK average in December 2010 was 6.2 Mbps, which would put us in 58th place alongside Papua New Guinea, the Ookla data is more generous. In May last year, the measured speed was 7.6 Mbps while the rolling average over the past month was 10.9 Mbps. Parts of the UK have clearly moved ahead although in rural Kent, home to “Eye On The Supply”, the connection speed is 0.69 Mbps, slightly below the average in Bangladesh, which is in 166th place.

Good news comes this week from Kansas, the 15th largest state in the US. The 2,600-mile fibre optic network, which brings the high-speed internet to rural areas there, will be complete by the end of this summer. It has taken just two years to construct the independent Kansas Fibre Network (KFN), which will have cost $28 million by the time it is ready.

Customers in remote parts of the state have been paying up to $70 per megabyte until now but KFN President Steven Dorf says, “With KFN we can bring down that cost by half, which then makes it much more attractive and available to subscribers in rural areas.”

Sometimes things look so much better over the rainbow.

Time to get real about copyright

May 23, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

Ian Hargreaves’ independent report on copyright in the UK arrived just five months after Prime Minister David Cameron commissioned it, but even its author agrees that “Digital Opportunity —A Review of Intellectual Property and Growth” could well find itself on the top shelf alongside many of its predecessors irrevocably marked “Too difficult”.

Hargreaves’ brush is broad and the report deals with a range of intellectual property rights (IP) from patents and designs to digital publishing. Many such endeavours take years to complete, at which point the commissioning government, or its successors, rejects the ideas they contain.

At least this one starts with the support of the Prime Minister, and the coalition government should begin work on the key recommendations immediately, particularly since the report itself describes the UK’s record on IP reform as “patchy at best”. The 2006 Gowers Review set a two-year deadline for fulfilment of its proposals. Five years on, more than half of Gowers’ recommendations for reform have not been implemented including one that sanctions a CD automatically ripped to iTunes, which is endorsed again in the new report.

It is, in any case, time for a radical rethink of how we define the case for copyright and for it to be based on tangible evidence and not on fears that it will upset the status quo. We have failed to convince consumers that copying is copyright theft; without far-reaching changes in current law, revenues will continue to fall.

The home entertainment industry shies away instinctively from the need to re-draft copyright law but the changes brought about by the high-speed internet make reform unavoidable. Content once protected effectively by the law is now disseminated widely without control. No amount of revision to a 300-year old Act can compete with the consequences of universal broadband access. It is not a matter of if copyright law should change, but when.

Hargreaves argues that it should be lawful to copy when it is for private purposes only and he points out that the UK has yet to implement European law that permits format shifting for music or video content. “Copyright law has started to act as a regulatory barrier to the creation of certain kinds of new internet-based businesses,” he says.

Among suggestions for change in the copyright law, the report notes “EU sanctioned exceptions will bring important cultural as well as economic benefits to the UK. Together, they will help to make copyright law better understood and more acceptable to the public.”

The report concludes that there has been “a clear demonstration of the failure of the copyright framework to adapt”. While true, this bald statement is certain to upset stakeholders in the home entertainment industry. The proposed remedy, that the Government should take “a constructive and engaged lead” in the process of reform, will require a depth of resolve that previous governments have shied away from. It is not a matter of abolishing copyright, more one of moving its point of application.

Hargreaves was tasked specifically to look at the workings of the “fair use” policy enshrined in the copyright law of the United States, which Cameron said would encourage in this country “the sort of creative innovation that exists in America”.

The report rejects legislation to implement fair use, not because of an objection to it in principle but because it would be difficult to convince other European countries that it is a good idea. It turns down “the big once-and-for-all fix of the UK promoting a fair use copyright exception to the EU, as recommended by Google and under examination by the Irish Government,” in favour of “…copyright exceptions at national level to realise all the opportunities within the EU framework, including format shifting, parody, non-commercial research, and library archiving”.

This paradox — fair use described as a “once-and-for-all fix” while at the same time it is ruled it out — is not resolved in the report and it leaves an important question unanswered: Is it really possible to continue our fragmented approach to copyright when high-speed broadband interconnects Europe?

Both sides of the divide frequently misquote the fair use provisions of the American copyright law in support of their argument. The 2009 US Copyright Act is actually more prescriptive than any legislation in the UK.

Explanatory notes from the US Copyright Office state, “The distinction between fair use and infringement may be unclear and not easily defined. There is no specific number of words, lines, or notes that may safely be taken without permission.” The web site advises, “The safest course is always to get permission from the copyright owner before using copyrighted material.” In the UK, the Intellectual Property Office is not even empowered to publish formal opinions in order to clarify the application of copyright law. Hargreaves proposes to remedy that.

The American concept of fair use does not imply unrestricted exploitation but it does set out clearly the circumstances in which copyright material may be used. Section 107 explains what is and what is not permitted and it empowers the courts to take action against those who break the law. For unwitting infringers, such as a classroom teacher making copies beyond what is allowed, penalties are sharply reduced. On the other hand, unlicensed commercial exploiters of copyright material pay dearly under American law and there is no reason to believe that a British or European equivalent would be any more lenient.

Rebellious British bloggers that agitate for the unlimited right to copy anything and everything they find on the internet and cite “fair use” as their justification, would do well to consult their American counterparts. They will discover that it is not the free-for-all of their dreams.

Cameron too may have misunderstood the implications of asking for fair use legislation but Hargreaves has sidestepped the argument in this report. Tinkering with existing law could burden the home entertainment industry with ever-more complex regulation, which consumers will continue to ignore, without resolving the contradictions at its heart.

The Digital Economy Act, which the Labour government rushed through in its final hours, is an example of what can go wrong when we attempt to patch a broken framework. The philosophy of “penalise and punish”, which underpins the copyright debate, is only enforceable when a reckless few are involved in illegal activity. Once retired seniors indulge in dodgy downloading — and these days they do — the battle is all but lost.

“UK copyright law currently makes everyday consumer activities, such as back-up and format-shifting of music, films and e-books, illegal,” says a submission to the report from the rights watchdog Consumer Focus, which is under threat of abolition. “Copyright law needs to be future-proof so that primary legislation does not have to be updated in step with technological advances.” They make a good point.

Online copyright infringement is widespread and otherwise law-abiding broadband users see little or nothing wrong in “stealing” music and video. In these circumstances, the solution is not more legislation, or even better education. A fundamental rethink of the presentation of copyright is required, changing the conventional wisdom that has survived for three centuries.

Hargreaves describes copyright as “a protected source of income for creators”, which has never been strictly true. The first copyright Act anywhere in the world, the Statute of Anne, came into force in 1710, three years after the creation of the United Kingdom. The legislation was in response to lobbying by the Company of Stationers who had lost their royal monopoly on printing and publication some years before and were anxious for recompense.

According to a contemporary account, they “came up to parliament in the form of petitioners, with tears in their eyes, hopeless and forlorn; they brought with them their wives and children to excite compassion, and induce parliament to grant them a statutory security”.

Far from recompense for authors of copyright works, the Statute of Anne awarded the income from the sale of printed materials to publishers and printers, who would pay authors as they saw fit. Initially without time limitation, the period of validity was subsequently restricted to 30 years. Today, copyright protection extends for 50 years after the author’s death with some parties seeking an extension to 70 years.

Copyright protection was never intended to be a “source of income for the creator”, who might have died decades before. It generates a revenue stream for the rights owners, their heirs and assigns and there is nothing wrong with that as a business model so long as we acknowledge the fact. The publisher takes the risks inherent in the manufacture, marketing and distribution of the books, discs or other physical media. In return, the author of the work receives payment in proportion to the revenues received. The law of copyright has proved its worth as a means to fund creative endeavour, so maybe it is time to stop talking about it as an alternative to the provision of charity for starving artists.

For viewers, there is little to differentiate between the digits arriving from Qriocity, Virgin Media or the BBC iPlayer and the downloadable files they discover through their online search engine. The introduction of the connected TV makes it harder still for consumers to tell what is legal and what is not. For every strategy designed to block unwanted content, a gap will appear somewhere else in the defences and the cost of keeping the enemy at bay will escalate, as Sony has found recently to its cost.

The solution is not ever-more complex copyright laws but the effective monetisation of audio-visual content on every device the consumer owns. That will require some fundamental changes to the way we think about copyright, which Hargreaves advocates without defining the solutions.

A merely modified copyright law will not ensure the continuing need to fund creative endeavour. No legal system can keep pace with the speed of innovation and without switching off the internet – which Egypt tried to do and failed – most of the population will continue to seek premium content from any convenient source.

Consumers pay the BBC, Sky, Virgin Media and others to deliver premium content to their TVs, smartphones and PCs. They might not be happy with how much it costs but they accept the need to recompense adequately the content creators, rights owners and distributors. In the UK currently, this direct relationship does not exist between consumers, the retailer and the music and video publishing industry.

When it launches later this year, UltraViolet will tie together physical and digital media in a way not possible before and make format shifting simple and “buy to own” a reality for the consumer who fears technological obsolescence. With its introduction will come new usage models that challenge existing legislation including the distribution of premium content free of charge, which may be unlocked and paid for at a time of the consumer’s choosing.

This model, or something like it, promises much more than continued opposition to change in the copyright law. 

Until there is a fundamental shift in attitudes, consumers will continue to find ways to take what they want online, from wherever they find it.

Another page in the Domesday Book

May 15, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

The BBC unveiled its Domesday Reloaded website this month and restored public access to the interactive Domesday Project to which more than a million people contributed in 1986. The content was almost lost forever when the technology failed to catch on. Thanks to a few dedicated enthusiasts who converted the data to a 21st century alternative, the many people who participated 25 years ago can at last go online and re-discover the England they inhabited.

The story of the Domesday Project contains an underlying warning for content owners tempted to mortgage their future fortunes to any single technology: innovation inevitably leads to obsolescence.

In the 1980s, pupils and teachers from 14,000 schools surveyed their local areas in an attempt to recreate the 1086 original. The text and photos they gathered was compiled on 12-inch LV-ROM Laservision discs controlled by a BBC Micro Master computer. The complete package sold for £5,000, which would be expensive even now, and it’s no surprise that the BBC sold fewer than 1,000 systems.

Today, the computer and player hardware is obsolete and hard to find. Few discs remain, mostly due to a problem known as “laser rot”, and they are frequently unplayable. Without the efforts of George Auckland and Alex Mansfield at BBC Learning and the image reclamation work of project co-founder Andy Finney, the project would have been lost to public view. The BBC website, which went live on May 12, provides a priceless window into the world of the 1980s.

We are so familiar with digital data that it is easy to forget its ephemeral nature. Hardware breaks down; repairs and spares are unobtainable; and formats simply fall into disuse. Online, there are many potential points of failure in the link between content owner and consumer. An unpredictable malfunction in a data centre can lead to the loss of consumer content in a moment, as Amazon, Sony and others have recently found to their cost.

Increasingly, our entertainment is stored in the cloud, hundreds or perhaps thousands of miles from the user. Information comes and goes, wirelessly or through glass fibre; the connected TV plucks programmes from a digital Freeview transmitter, a satellite in space or a broadband connection: what can possibly go wrong?

According to a December 2010 survey by backup and recovery specialists Acronis, while 83% of consumers recognise the need to back up their data, only 15% do so on a regular basis. A quarter of those polled run backups only when they remember and almost a third never backup their systems at all. Only when discs crash, laptops get lost or data is accidentally deleted do the consequences become clear. The irreplaceable family photos, holiday videos and downloaded content have gone, usually forever.

Late MPAA President Jack Valenti once said of DVD and Blu-ray Discs, “You can’t backup wine glasses, why should you backup a movie? If you want a movie, you buy a copy. If you want a backup, you buy another copy.”

Things are about to change, of course. A digital copy of each purchase will be stored in the UltraViolet (UV) digital locker, which promises “lifetime content ownership”. In the near future, should the Blu-ray player in the home give up the ghost, there will always be a UV copy for you to stream or download. Probably.

The Domesday Project demonstrates that a lot can happen in 25 years. Will Blu-ray players be around on which to play our expensively acquired collection by 2035? Will the titles we own still be available online from our digital locker?

But then, who will want to return to the days of ultra-fast fibre to the home delivered through expensive cables buried in the ground when solar-powered light-emitting satellites continuously load our solid-state holographic mobile vaults with every movie ever made? A lifetime of entertainment; at a very reasonable €4,000 per minute …

Successful technology, of course, can be very persistent. Amazon still sells significant numbers of VHS cassettes even though the ageing players are wearing out rapidly. Relying as it does on dragging rusty iron past stationary guides and spinning heads, the mechanical nature of the VHS machine contains the seeds of its own downfall. As with the Compact Cassette, the thin VHS tape curls, creases and snaps, and takes with it both pre-recorded films and personal memories of the past.

Computers, set-top boxes and DVRs contain at least one spinning magnetic disk and this mechanical component is often the weakest link. Despite the fact that modern hard disk drive technology is superficially more secure, a disk crash is the event most likely to bring digital technology to a standstill.

These power-consuming mechanical components already give way to the solid-state drive (SSD) that will transform mobile devices. The SSD has grown in capacity and fallen in price since it was first introduced in 1995. Although the 64 Gbyte flash memory card is relatively expensive today, the cost per Gbyte will fall, even as the capacity continues to rise. The ability of a dual layer Blu-ray Disc to store 50 Gbytes, much vaunted at the launch of the format, already looks inadequate.

There is no physical contact with CD, DVD and Blu-ray drives, so content delivered on these formats should remain playable for some years to come. Digital discs, however, have mechanical components too and the laser that shines its red or blue light onto the spinning disc dims with age. Manufacturers suggest that with average use, modern lasers should last 10-15 years, so the motor that spins the disk will probably give out sooner.

A laptop without an optical disc drive was once almost unthinkable, yet few netbooks, tablets and hand-held games consoles include one today. If (or should it be when?) entertainment content is no longer delivered on disc, the factory-fitted optical drive will vanish rapidly from computers and games consoles as well. Without access to a digital locker and with no easy way to by-pass copy protection systems, most DVD and Blu-ray collections could become rapidly worthless.

The disappearance of a technology rarely happens overnight. Unless there are serious health and safety concerns, most unsuccessful formats simply fade away, which is what happened with the Compact Disc-interactive player that promised to provide “the other half of your TV” in the early 1990s. Together with VideoCD, DVD-Audio, VMD and many other embryo formats, CD-i is now little more than a footnote in the history of content delivery.

When William the Conqueror commissioned the original Domesday Book, he intended it to be the first comprehensive survey of towns and villages in England but the project went unfinished. The king died while the project was still a work in progress and active data collection ended shortly afterwards. Despite this setback, the Domesday Book and its replica editions have been a source of reference for approaching 1,000 years.

The two completed tomes are stored in a specially constructed chest at the National Archive in Kew, near London. Readers need to be conversant with the Latin calligraphy of the time to understand the contents but they require no special equipment to see the pages. 

Some technology has a very long shelf life.

Consumer as gatekeeper

May 09, 2011
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

The announcement that Warner has acquired Flixster, a social network for film fans, came in a Time Warner conference call to present the lack-lustre Q1 figures. The media firm’s profits were down 9.9% in the first quarter, a result that Warner attributes to the decline in the number of DVD releases so far this year.

Quite why Warner Bros. Home Entertainment Group (WBHEG) would want to buy the News Corp. cast-off Flixster when times are hard is difficult to understand. Ownership of the Rotten Tomatoes film review site, acquired by Flixster in January 2010, might perhaps hold the key.

CEO Jeff Bewkes delivered the acquisition almost as a footnote to the Time Warner quarterly figures and promised more details in due time, “We’ll use the Flixster brand and platform to launch several initiatives that aim to dramatically improve the consumer proposition of owning digital movies, and we'll do that in a studio-agnostic way that should benefit the whole industry.” So far: so altruistic.

Bewkes continued, “In short order, we plan to expand the functionality of Flixster to allow consumers to organise and access their digital movie collections, on whatever device they like, as well as to buy and rent movies.” This portmanteau description of Warner’s plans for Flixster tells us everything and nothing about why the group would spend a rumoured $80 million to acquire the two sites, plus a further $20 million in bonuses if executives meet performance guarantees.

Neither Flixster nor Rotten Tomatoes has made the breakthrough that could take their websites out of the realms of the ordinary and into the super-league of social networking. Both sites trail some way behind the Amazon-owned Internet Movie Database (IMDb), which CEO Col Needham founded in the UK back in October 1990 and is now the web destination of choice for 100 million film fans each month.

Traffic data from the web analysis company Alexa shows that just five million individual users accessed Rotten Tomatoes last month, while Flixster counted 1.3 million unique visitors. The Alexa data also reveals that the trend in site visitor numbers is in long-term decline. The claimed statistic of 25 million users per month for the combined Flixster sites appears optimistic at best.

The unfulfilled promise of Flixster might be why News Corp. decided to cut its losses and sell. WBHEG was left as the sole bidder after Yahoo, the only other interested buyer, pulled out of negotiations at an early stage. Unless things take a sudden turn for the better under the new owners, it could prove an expensive investment.

Warner could pull one cat out of the mixed bag it has bought into, however, with the highly successful “Movies By Flixster” application for Facebook and smartphones. Although IMDb leads the market in online film data, Flixster has made the smartphone app its own.

More than two billion film reviews from users provide a consensus of what is good and what is not on the Rotten Tomatoes site. A red “fresh” tomato signals films that have attracted positive comments from 60% or more of users, a green “rotten” tomato indicates a preponderance of negative reviews. This human intervention makes the results more valuable than the aggregated data delivered by a computer search engine no matter how impressive the underlying mathematics might be. If Warner has grasped the significance of the role Flixster plays in this evolving market, their investment could yet prove to be timely.

If “Curation Nation”, a book written by producer and filmmaker Steven Rosenbaum and published earlier this year by McGraw Hill, is to be believed, “the future of content is context”. The book has been acclaimed by a wide cross section of the business community and reviewers have commented that it is “required reading for modern retailers” and presents a “road map for developing consumer experience by curating content around your brand”.

Author Rosenbaum says that content overload — including the tweets, emails, voice mails and blogs that assail our senses each day — requires human intervention to reduce what he calls the “fire-hose of data” into a comprehensible and relevant stream. He hijacks the traditional role of a curator to define this process as curation and suggests that humans are back in charge as moderators of good taste in an era of data overabundance.

Rosenbaum writes, “Without a coherent human filter to create contextual and digestible information, the noise is rapidly approaching a place where it drowns out the signal. Un-checked, the data will make our collected heads explode. Kaboom!”

He’s not alone. At the Harvard-Smithsonian Center for Astrophysics, Michael S. Papish focused his research on supercomputer simulations of large-scale structure evolution in the universe. Having tackled the organisation of outer space, he returned to earth-bound content and in 2000 he co-founded the recommendation specialist MediaUnbound. Rovi acquired the company in March 2010, reportedly to secure the services of its talent. Now Rovi Product Development Director, Papish stresses the importance of curation in a conversation with Cue Supply Chain.

Papish says, “Traditional programmers decided what to put on the air; the radio or TV station was the gatekeeper, controlling what you could listen to or watch. With recommendation engines, we have changed the location of the gate. Instead of the broadcaster deciding the line-up, the consumer becomes the aggregator, creating a personal channel that conforms to their own way of looking at content and sending them to their chosen programmes.”

He says this does not disrupt the importance of brands and their curation of content. “Take, for example, MTV or HBO, channels that retain their branding and offer a consistent view to their audience. Or Fox: people who are happy to watch Fox Entertainment may never watch Fox News and vice versa, yet they remain loyal to the brand.”

We should think of the relationship between content owner and consumer as one of trust, he says, and every good recommendation enhances the trust of the consumer just that little bit more: “In domains such as e-commerce, search is about finding the objectively correct thing that you are looking for. So if the batteries are flat in your remote control, the search engine comes right back with the correct batteries. Entertainment is much more subjective and we need to think about how we establish that trusting relationship. Our goal must be to maximise trust over time.”

He is quick to point out that content recommendation does not just mean mathematical formulas that accept one search input and give back a number of related items. “Some people may define it that way but Rovi has always believed that recommendation and discovery is about understanding users’ expectations. Our aim is to help them to find the things that they are looking for already and to discover things that they have yet to learn about,” he says.

There will always be a role for someone to guide you to the source that you are looking for, says Papish. This curation must take into account the environment, subscriptions and device that you will use to access the content: “The history of the entertainment industry shows that there is always a gate-keeping aspect to accessing content since there some restrictions on the ways programmes are licensed. This goes back to the question of objectivity; the reason why consumers trust certain gatekeepers is that they believe they are objective sources, working on their behalf.”

Whether that happens through the intermediary of an apparently automated system or through the intervention of friends on Flixster or Facebook is not important, all interactions are equally valid forms of discovery or recommendation. “Consumers are aggregating reviews from the community — people who are out there, who are like them and who watch and write about movies,” he says.

Flixster benefits clearly from the curation of its many users. The downward trend on its websites might be no more than confirmation of a long-term shift from the web to the wider internet. This is driven by the growth in dedicated applications that take users straight to the information they need. Chris Anderson wrote in Wired magazine last August, “As much as we love the open, unfettered web, we’re abandoning it for simpler, sleeker services that just work.”

Rovi is aware of the pitfalls of expecting consumers to learn complex systems. Papish says, “The more work they have to do, the less they consume. If we want digital commerce to be a large money-making business for the content industries, it must become easier to use: it is a problem we have to solve.”

Warner Bros Home Entertainment Group President Kevin Tsujihara says, “Driving the growth of digital ownership is a central, strategic focus for Warner Bros. The acquisition of Flixster will allow us to advance that strategy and promote initiatives that will help grow digital ownership.”

In the Rotten Tomatoes database there are 250,000 films, 2.3 billion user ratings and 500,000 opinions from respected critics. People visit Flixster to discover information and opinions about the entire film industry, not simply the output of a single studio.

As long as Warner keeps to its promise to allow Flixster to follow an autonomous path, the rewards for both partners could prove substantial.