VOD Closer to Reality

July 31, 2009

One more news for Microsoft this week. The launch of their VOD platform in the UK. Their PR department seems to be running their business these days, with one objective in mind: be in the news! (If nothing else, they would show up on top in Google search results!!).

Jokes aside, this is a significant move in the world of VOD. They have toyed with supporting other platforms through XBox consoles, but venturing into a platform of their own is a first.  They also have the scale to take this beyond the Computer screen into living rooms via XBox, and into portable of course. They also seem to have cracked one of the most important elements of this type of venture- a collaboration with GroupM. I am not going to comment on that deal, but having the backing of a major commercial player behind your platform is a critical factor.

The only other critical factor would be their ability to get content. iPlayer, C4OD, and iTV interactive might look at this as competition in short term, but truly they all know their content would be better off on a cross channel platform rather than being on properietary service. But it is going to take some time. Given that Kangaroo is almost dead, and Hulu might come in to the UK in October, they need to hurry up to pile up inventory of programming- both from the UK and perhaps source some from the US (which would be a tough battle given Hulu’s access to programmers at the moment).

One challenge that they world face is: How do they crack and standardise advertising effectiveness measurement on VOD? Good luck with that boys. It is a complicated area. Do not add yet another layer to it I would say trying to invent something of your own. Tap into an existing matrix.

In the world of on demand content and the fragmented world of digital platforms, it is fairly important for search to work properly for Videos.  After simply just playing with the idea for quite sometime, some of the big names in the industry are really beginning to crack it.

YouTube has its own way of searching for video files that benefits from not only the tags but also google’s search intelligence.  TiVo just recently annoucned their new search function.  Fairly comprehensive though, it only allows you to search through data that sits “outside” of a video file. Not the most cutting edge way of video search, but given its TiVo the usage of this is likely to widerspread and at least it recognises the need for a must have function for the future of Video.

How does the search currently work in Video? Well the simplest way is to search for “tags” associated with a video file, or search for terms within the video file names. Now that is not very effective, as the tags and the name cant possibly fully describe whats inside a video file or in the content, can it? To offset this, some of the set-top box manufacturers including TiVo search through “closed captions” (subtitles for instance) or the Electronic Program Guide data alongside a video file to search for the contents of the video file. It would allow you to even search for scenes with famous quotes from the movies (The BigMac scene from Pulp Fiction for instance). Whilst very useful, its still a very 2008 way of searching for video, and a very cumbersome one that too.

Then there is Blinkx (www.blinkx.com). They have a pretty impressive video portal that actually searches through the contents of a video file, and delivers you the search results. For example you can look for a particular word and see how many video files are returned. A much better schema for search then “tags”. They seem to have been looking for opportunity in the area of direct to consumer, but in my opinion their biggest opportunity is in franchising their technology direct to businesses like TiVo.  Not sure if they are already doing it, but they are the next generation of search in video, and can really help move the game forward.

The more the amount of content available to watch digitally, the more the need for search. The good news is, that the solutions are here today. Only if the industry can push those forward.

One of the most popular uses of a television set has been that of a screen for the gaming consoles. TV is now beoming a lot more connected with these consoles, or should we say the new generation internet-enabled gaming consoles are now beginning to recognise the power of being connected to a device like the television set.

When you have a programmable micro-chip and gigabytes of storage on any device connected to a TV, it is really difficult to resist using it as a “record and playback” device (Like a PVR/DVR) or even as a conventional set-top box to receive broadcast signal. All the popular consoles have been trying to get into this game for quite some time now to see how can they get a larger share of “screen time”.

Just yesterday at the E3 Gaming Industry Trade Show in LA, Sony reveleaed a double-capacity PS3 (meaing it has a 160 gig of hard-disk) and launched a service that allows users to download and rent movies- a direct competition to a device like Apple TV. This is not the first entry into Video-on-demand by a gaming console- however it appears to be one with some really valuable content on offer- given Sony’s own access to such assets.

Late last year, British Telecom partnered with X-Box for their TV distribution service where viewers are able to watch the BT’s video-on-demand content. Nintendo’s Wii jumped on the bandwagon this April announcing that the BBC IPlayer would be available on the consoles. Both these efforts mean that the owners of Wii and Xbox consoles can now watch TV programming- on demand- whenever they want to- on their TV sets and not on their computer screens. The open-ness of the availability of this on-demand content, however, is not that great. It is usually limited to one or two content-providers.

It is not just the gaming console’s partnerships that are helping define TV of the future. There are some really interesting examples of how TV content is being integrated into various games. Grand Theft Auto (developed by a company called Rock Star Games) has special TV content within their newest version of the game where gamers can, for example, watch Ricky Gervais perform live in a virtual comedy club in the Liberty City. Ricky did a special recording for the game.

Gran Tourismo 5 (developed by Sony), the most popular racing game in the world with over 50 million copies sold worldwide, has a virtual TV station of its own, called GT TV. BBC cracked a deal with GT TV last year whereby 40 episodes of Top Gear were made available to watch on GT TV. GT TV also features news and updates from the motoring world.

All this is really exciting. What is even more exciting is to think about the implications of it all on the advertising and media industry. Integration of the content into games is a really clever way of getting the consumers to pay for the content. In terms of advertising time, all of these efforts seemingly fragment the distribution of content, and hence perhaps the buying of advertising. However, it is not really difficult to imagine a situation where a “central” ad-server sells time on all of these platforms- much like the Apple’s patented technique, and major media owners like BBC, Sony reserve the right to sell and place advertising into their content themselves. Not different from what the TV stations do now, regardless of which cable or satellite platform distributes them (Sky, Virgin etc).