Disney-ABC, Roku Keynote Streaming Media West, Day 2

Day two of Streaming Media West 2008 opened with keynotes that addressed not so much video content itself, but how it's delivered to both PC and television. Albert Cheng, executive VP, digital media at Disney-ABC Television Group talked about the state of the episodic video industry, specifically as it relates to ABC.com. Cheng noted that the company's player growth over the two years saw 100 million views in the first year up to an aggregate of 440 million views this year.

Unlike alot of other sites that do supersubscription, where content is played back in a variety of players, ABC does all of its views through its own player. "98% of all of our viewers enter through ABC.com," said Cheng. "We do open our content (via metadata) to other search engines but maintains playback on our own player."

Cheng also talked about a new initiative, dubbed OpenABC, in which the company is opening up the player for applications to be written around the shows. For instance, a fan could write an application that would show a Google map that would have pins on it for each location in Seattle where Grey's Anatomy takes place. Clicking on a link would allow a particular scene or scenes to be shown.

"We see the ability for bloggers to provide a direct link, but we're not opening the platform all the way," said Cheng. "Video is very precious to us and we don't see going much beyond our own player."

While discussing advertising, Cheng notes that retention of ads is very high.

"66% of viewers retain the name of the company in the advertisement," Cheng also noted, adding that he feels the hype about not using 30-second spots is overhyped. "89% of surveyed viewer say three 30-second ads being acceptable for a 30-minute segment."

On the topic of content being king, Cheng notes that the 30-minute or one-hour episode is faring well. "The serial/episodic won't change," said Cheng. "We won't change the way we tell stories/episodes, but we're definitely driving extensions built off the story line. For instance, short story arcs of Ugly Betty (called Mode After Hours) or Lost are good examples."

When asked about a mobile strategy, Cheng noted the strategy must include the carriers. "We have deals in place," said Cheng. "On the web, we see our sites as access points that mobile users can access content, but we'll see how this all evolves since we're mobile video delivery is still in an early stage. 3G and WiMax are starting to allow us more robust experiments.

Finally, when asked about moving the web to the TV, Cheng noted that the problem is as much one of connections and interfaces as it is the type of programming. These thoughts were echoed by the next keynoter, Anthony Wood, Founder and CEO, Roku, Inc.

Wood's keynote was called "The Future of Internet TV: Primetime Anytime" in a reference back to a company he worked with in the early 2000s, Replay TV.

"Today, the DVR death knell begins to ring as streaming finally goes mainstream (at least on the PC)" said Wood. "Streaming from the internet to the TV is a much better solution."

Wood showed that distribution models have changed (a chart of Blockbuster's stock shows the stock down dramatically over five years) but content is still king, exemplified with Disney continuing to advance its stock price. "So how does one win at the TV?" asked Wood, referring to the marriage of watching web content on the television. "High-quality video is imortant: ABC has great video quality, while YouTube has marginal quality. Also, the appliance needs to be simple to install, with WiFi connections for easy connectivity to the network/internet, and must be easy to navigate."

One Roku box that—for now—works just with Netflix allows unlimited viewing and connects directly to the TV similar to Apple's AppleTV. "There's a PC part of the UI, and a box part of the UI," said Wood, noting that the user portion (the "box part") is critical for the end user to navigate.

"We've chosen to allow direct browsing of movies to choose," said Wood, and the type of content is also important. Netflix just cut a deal with CBS, so it's not just movies that are available via the Roku Netflix Player, now that CBS and NBC TV series are also available on the box."

Wood noted that the Netflix Player measures bandwidth and chooses best bandwidth to stream, can pause the content and can even fast forward/rewind the content.

"The question is how to fast forward/rewind in a streaming scenario," said Wood. "We handle the issue by buffering the show but also pull down little clips for every 10 seconds of the movie, so that a user can skip forward to different parts of the movie or show."

So where is this heading? Wood sees two aspects that need to be addressed.

"Consumers want choice, unlimited content (every show in every language), and access to emerging web services," said Wood, "but overall they want value. The industry wants proven business models without tolls and the business models that have been around for 20 years (ad suppported, subscription or pay per view) are still good enough for the industry. In addition, the industry wants standards and content protection."

Roku expects to marry the two sides by delivering an open platform. "While we currently sell the box for $99 and it only works with Netflix," said Wood, "we're going to launch software that will allow anyone to publish a channel or choose to watch any video content on the TV."

When asked how the revenue model work with an SDK, Wood noted that Roku only sells hardware, but is putting alot of effort into supporting the three business models.

"What's the net effect on ISPs if you deliver video to TVs rather than just to the PC?" an attendee asked Wood.

"We don't see that we'll have a significant impact in terms of the total amount of video consumed 'on the web' since there are more than a billion streams served in a year," Wood answered. "People buy boxes that provide a value: starting with VCR, DVD, DVRs and now Blu-ray and Wii. We see that trend continuing—more boxes needing more connections to the TV and our box is a natural step in that that trend."

A follow up question asked if Wood foresaw a time when these features will be built in to the television?.

"We think that the standards change quite a bit, so we don't expect the manufactures will build them in for quite some time," said Wood. "Consumer TV manufacturers don't do user interfaces so well, so it will be several years. The bigger question is what about competing boxes such as Apple TV? There are boxes out there that do what we do, but we spent alot of time focused on the price—we're $99 versus hundred of dollars for other—and we don't tax the consumer or the content provider. As such we're outselling everyone else in the space."

Streaming Media West continues until Thursday, September 25, 2008, in San Jose.

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