Scheming for Streaming

October 18, 2010
For an informed view on connected entertainment in the UK & Ireland, visit Cue Entertainment 

At a hotel deep in the heart of West London last week, a group of specialists schemed to overturn the world of television broadcasting, as we know it. A few miles away in an anonymous office block, another group announced a plan to take over many of the games consoles in the UK and turn them into home cinemas.

Should we be worried by this turn of events?

The last quarter of 2010 might be thought of in the future as the fulcrum of the online video revolution; the point at which consumers ceased to consider streaming media as something for their PC and turned to it as an alternative source of TV entertainment. Should that happen, the schemers, who attended Streaming Media Europe 2010 (SME2010) at the Novotel London West, would be among the beneficiaries.

Organisers describe the awards ceremony that accompanies this event as the “influential annual programme for the European online video industry”. Finalists, chosen by 12,700 readers of Streaming Media magazine, are said to be “a who’s who of the online media industry” and who has not heard of live event specialists “Streaming Tank” or “BeBanjo”, “Flumotion” or “Wowza Media Systems”?

These organisations and more were among the prizewinners announced at the presentation party at the end of the first day and, to be fair, they were in good company. Also honoured were ITV for best mobile video application, Amazon Web Services for best delivery network and Spotify for best music delivery solution.

Such companies play an ever greater part in the future of online delivery, and the presence of at least one member of the “old school”, namely ITV, shows that it is possible for an old dog to learn new tricks.

There will inevitably be future acquisitions, mergers and insolvencies among this year’s winners, whose bosses should remember the lesson of the AOL/Time Warner debacle. Nevertheless, it’s possible that some of the names in the streaming media business might one day approach the renown of BSkyB, Disney-ABC or NBC.

Brightcove already is established as a world leader in online video publishing and distribution with more than 1,800 clients ranging from Channel 5 and ITV to the Universal Music Group and Virgin Media. President and COO David Mendels was on hand at SME2010 to decode the complexities of consumer demand for more video on more platforms, which he describes as “one of the most daunting developments confronting media publishers today”.

Following his conference keynote, Mendels said that Brightcove operates at many levels within the online video supply chain. Clients range from broadcasters with their own content to newspapers that create their own content alongside video from AP and Reuters. Brightcove even provides an online presence for the cable industry – Discovery Channel and Showtime are among its US clients.

What makes Brightcove interesting for any content owner is its entry-level pricing for an online video platform that starts at $99 and rises in relation to the volume of video traffic. This “express package” is designed to make it easy for companies to start small with video streaming and grow seamlessly as demand increases, all the while providing a video stream to equal the big boys.

Mendels is aware of the need to avoid “re-buffering events”, those not-infrequent delays in delivery that quickly turn consumers away. “If you start with a low quality stream and a poor connection, we can dynamically adjust the quality of the stream as the video plays,” he says. “Although we can’t control the global internet, this normally means very low buffering rates. It’s something we look at all the time and we put a lot of R&D into making sure our performance is continually improving.”

He describes 2010 as a threshold year for people’s willingness to bring content online and for online advertising. “The technology has matured so we can deliver video in a scalable way and the result is an explosion of viewing,” Mendels says, “The proliferation of devices means that more people are consuming more media, more times. This has been a really pivotal year.”

He says there’s a battle going on for who will make money from online video between Apple TV, Google TV, and Comcast. For the moment, Mendels is unwilling to speculate on winners and losers but he points out that the fundamental trend is towards more video online.

“The rate of growth might speed up or slow down. If more stuff is available for free, it will go faster, if you charge for it, it will go slower, but you are not going to stop it,” Mendels says.

Brightcove works closely with content delivery networks such as Akamai, another major name in the streaming video business, and Mendels says there is no technical barrier to delivering high quality TV over the internet. “Akamai is making very large capital investments to enable a world in which true HDTV is available, the scale is just phenomenal. Their investment has lowered the cost of streaming,” he says.

Mendels says he never watches anything over the air now because he doesn’t know when things are on. This hasn’t prevented close cooperation with another SME2010 exhibitor, content discovery company TV Genius. Just a few steps away from the Brightcove stand at SME2010, Business Development Director Matt Hall was keen to demonstrate the progress of the company over the past year.

Like many revolutionaries, TV Genius works behind the scenes invisible to consumers but providing the technology that sits in the background of video services provided by others. Content owners can create rich user interfaces quickly and inexpensively, and then incorporate the search and recommendation system into their online presence.

A software-as-service technology licence with the client forms the basis of the agreement with a monthly fee charged according to use. “One of the main reasons that consumers end their monthly TV subscriptions is because ‘there is nothing on’,” says Hall, “Companies such as Sky spend around £250 million each year just to win back these lost customers. Research shows that if you can help viewers discover an additional 16-18 minutes a week of content that they enjoy, the loyalty of a pay-TV subscriber goes through the roof.”

TV Genius’ plans to take over every TV screen in the country are well advanced but others have their eyes on that living room real estate.

The Sony PS3, launched as an over-specified games console, is fast revealing its true colours as the home media centre of the decade. The integrated Blu-ray Disc player and high-performance graphics engine make it almost the perfect choice as an entry-level 3DTV unit. Now it is set to play an important part in a plot hatched by Lovefilm Chief Executive Simon Calver to add up to 3 million potential users to Lovefilm’s current 1.4 million-subscriber base.

Lovefilm introduced its brand to the direct-to-TV market in March when it signed a deal with Sony Computer Entertainment UK (SCE UK) to bring its online subscription service to connected Sony Bravia TVs and Blu-ray players. In partnership with SCE UK, the Lovefilm streaming service will in future appear on the main screen of connected PS3 consoles.

This announcement heralds the complete integration of Lovefilm’s DVD, Blu-ray and streaming video services in the home and the company even offers exclusive incentives to persuade PS3 owners to sign up. The games console has proved to be a Trojan horse – now everyone in the family will be fighting for control.