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Q&A With William H. Mutual, President and Chairman of POPcast

Traditional webcasting can be rather expensive and labor-intensive.POPcast hopes to change all that.

Although POPcast (http://www.popcast.com) president and chairmanWilliam Mutual describes his company first and foremost as anapplication service provider (ASP), that doesn't really explain itfully. Essentially POPcast acts as broadcast service for users thatwant to share streaming video files. It allows users to upload videoto POPcast and it sends back a Windows Media link that's ready to bee-mailed to friends or family. In other words, say goodbye to thosehuge e-mail attachments when sending video. The service is free forend-users--the only catch is that your video is surrounded byin-stream advertising.

Of course crucial to POPcast's business model is that people trulywant to share video. That means they must have audio and video filesthat they are just dying to show off to the world. POPcast--andcompanies like it--are betting that people are ready for this. Andthey're also betting that it will be easier to get audio and videofiles onto our computers.

So far, things look promising even though POPcast just barely openedits doors. POPcast is showcasing its free webcasting service tryingto get portal and community web sites to salivate and say, "Yes, wewant that!"

Los Angeles-based POPcast acquired webcasting company ITV.net late in1999 which William Mutual founded five years ago and served as CEO.Prior to founding ITV.net (http://www.itv.net), Mutual operated hisown post production and music composition studio for the filmindustry.

Streaming Media Newsletter: OK, describe just what POPcast is.

William Mutual: POPcast is an application service play (ASP).

Q: It's not a portal play?

A: No, we're an application service provider (ASP). We're usingPOPcast as a demonstration site of ability for providing to one andall and it allows for automated webcasting. Of course I come one ofthe longest established webcasting companies, ITV.net. No one knowsbetter than us how labor intensive traditional webcasting is. So welooked at things several years ago and decided there had to be abetter way to provide webcasting. Either directly coming from thePOPcast site or a partner portal, from a software manufacturers,camera makers, you can directly webcast to our network. You have atremendous amount of enhanced control that you simply don't have inany other system, including traditional webcasting.

Q: So your market isn't just consumers, it's anyone who wants to putvideo on the web?

A: Exactly.

Q: So what you're doing is just making it easier to get intostreaming.

A: Correct. Behind that very simple front end is an unbelievablycomplex traffic cop/database. Basically we have an anonymous webcastfacility. You need a phenomenal amount of checksum security,analysis that has to be taking place every step of the way. Ifwe're going to allow people free webcasting at modem speed, we don'twant them sending up T1 video without a proper account upgrade. Soto be able to handle all those ongoing changes, what their accountpermissions are, what they're allowed to do, how much gas in the tankyou have. There's just a phenomenal amount of granular analysis thatmust be going on in the backend constantly.

Q: Is it automated?

A: It's a fully automated system.

Q: That must keep your costs down.

A: We come in around 1/20th of market rates.

Q: So how do you handle the bandwidth for all this?

A: Well POPcast owns one of the largest streaming media networks.We're in alliance with Teleglobe, which is one of the big six tier 1providers. We have a very, very strong network and a number ofbandwidth relationships. On our ITV.net side of the company, we'vedone the Grammys, Tonys, Emmys, virtually every large webcast you canthink of.

Q: Tell me about that then. Why did you decide to join POPcast?

A: Well, there was a very close relation from the get-go between thetwo companies. But POPcast was from its inception focused on thisautomated technology creation. ITV.net has continued to provide forthe large event webcasting and it seemed an appropriate way to keepboth business units and brands functioning. They are actually verydifferentiated areas of business. ITV.net continues to do its livewebcasts (event webcasts in particular) and POPcast is completelytechnology automation based.

Q: So how will the two units work together?

A: Well ITV.net possesses the network and all the bandwidthrelations from extraordinarily talented technicians. POPcast ownsthe technology and uses the ITV.net network. So it was a verylogical usage of resources.

Q: So will you be featuring your large event webcasts on the POPcastsite?

A: Yes we will.

Q: So tell me more about your ASP business, which is your real breadand butter.

A: ITV.net continues as a self-sufficient enterprise, butmanual/traditional webcasting is really inherently unscaleable. It'sjust too labor-intensive and there's only so many large events, andthat's a reality. So POPcast is, we believe, the truly firstscalable webcasting enterprise. Our focus in the ASP play is that webelieve we hold tremendous value to any portal that wants to enabletheir users. The new camera manufacturers are all bringing nativedigital cameras out--the first marquee client for us is Sharp withtheir MPEG-4 camera but many others are bringing these new formatcameras out. So you have one of these new video boxes and you wantto send a file to someone. The traditional way of attaching a fileto someone is not likely. An MPEG-1 is just too large to attach andsend to grandma.

Q: So people need a place to go?

A: Well you don't necessarily have to go anywhere to watch a video.You are able to send a link directly from your email to people who'dlike to watch your video. In the case of a portal relationship theymay require (due to stickiness) that they watch from their web pages,so we enforce any of those rules. Really, any business conditionthat you can imagine, we have very quick tool sets that allow us toaccommodate client's needs.

Q: It seems a lot of people have been wanting to put video on theweb but it just hasn't been happening. For example, with Yahoo,Broadcast.com and Geocities--why can't they do something like this?

A: Well, we believe that they will very quickly. We have to stressthat this is really the first such play of its kind on the web. Toachieve this, you need substantial network resources, but again, acomplex database architecture in the background to provide a simpleservice. And if you can't provide it simply with the security neededthen no one's offering it--your comment on why aren't broadcast.cometc., providing these services: I think we're just becoming aware nowof what we've created and what a revolution this portends.

Q: So do you see more people using video in the future?

A: We believe video is going to become extremely prevalent in thenext few years, in tandem with broadband becoming more ubiquitous.But even with a 56K modem, you can actually get a very good videoexperience. With the new dedicated streaming cameras coming online,that will enable a huge new populace of webcasters. A very importanttechnology addition are the USB capture devices being released andthese are between $40 and $200 and require no skill to plug into yourcomputer. They enable your HI-8 camera, VCR or any video sourcewithout having to configure a capture card.

Q: So are we at the early adopter stage, with just hobbyists tendingto use video at this point?

A: That's where we are right now, although things will changeradically. I don't know if you saw Bill Gates speech [at StreamingMedia West '99] but really the focus of that was the Millenniumoperating system, and Microsoft's own video publishing enablement inthe operating system.

Q: Movie Maker?

A: Movie Maker, yes.

Q: That's a good sign, right?

A: It's an extremely good sign.

Q: I guess Microsoft is betting, as well as lots of others, thatthis is what people want.

A: I think another very important piece I think should be isillustrated going on in Japan this summer--the video phones they'rereleasing. These are IP MPEG-4 based phones, service is about thesame as traditional cellular phones and you're going to havewireless video technology which is basically webcast video as commonas a traditional cell phone.

Q: What connection speed is it?

A: It's a 64Kbps wireless connection.

Q: Sounds pretty good.

A: Yeah. And they'll be released in very large mass, this summer.So we think that's going to be particularly significant for ourgrowth. We're all fairly aware how camera-crazy the Japanesepopulation is and right now they're saddled by incredibly expensiveISP modem charges. So as they migrate to a wireless network at avery low cost, that's going to enable a tremendous population base.

Q: How will you make your money?

A: Well, on the ASP play we get a licensing fee from our partnersand streaming ad revenue subsidizes the operational costs. So if youwant to have free video of your son's first birthday, the price isgoing to be a book-end video. Maybe sponsored by Ford in thebeginning, then here comes Johnny's first birthday, then 5 seconds ofthe new Ford Winstar with the built-in baby seat.

Q: Will it be tied together that closely?

A: Yes, a dynamic relational streaming ads is part of the freeservice. If you don't want commercials, that's an upgrade and that'sa fee-based service. But we come in at a fraction of the existingmarket rates. If you want to come in at broadband, that's more abusiness-to-business or high-end consumer service, we're very happyto sell you an upgrade pass. But compared to manual webcastingcosts, we blow the market away.

Q: You mentioned the advertising that bookends the video, but do thepeople who own the content get a piece of the ad revenues?

A: No. I mean there're getting a free service if they want to comeinto that price point, it's like watching television. If we havesome very advanced upgrade pass for a video owner--if they want tohave encrypted video, built in Digital Rights Management (DRM),subscription services, etc. again that's an upgrade pass but they cancontrol their own destiny. So anyone who has content that wants touse us as their network back end, their complete coordinator ofviewership control, we're fully enable to provide those abilities andwe really have the singular ability to give that kind of autonomouscontrol to anyone.

Q: Do you think users might say, "Hey I don't want these ads aroundmy video, but I don't want to pay either"? Or maybe "I want a cutfrom the ads appearing around my video"?

A: Well if we look at Hotmail, people have adopted en masse to freeHotmail delivery but how does Hotmail make it? There's banner ads.Intrinsically there's not much a whole lot of difference between abookend streaming ad and a banner ad.

Q: It just seems more intrusive to have Ford introducing your video.

A: Well if some of our portals would prefer to provide their users anon-streaming ad experience, they can just pay us a higher licensingfee and we're happy to implement it on those terms. But at the endof the day, both the portal and ourselves have to pay our operationalcosts. And as much as the consumer wants everything for free anddoesn't want to be burdened by ads, someone's got to pay the piper atthe end of the day.

Q: And pay for the pipe, too.

A: Yes.

Q: Can you reveal your ASP pricing fees?

A: I can't. It's a complex to and fro with companies on marketingissues, size of the opportunity etc. We don't release thatinformation.

Q: There's a company called Javu that's an ASP too that offers aweb-based video editing site. Do you have any plans on offeringtechnology like that or even licensing it from Javu?

A: Well. I guess the short answer is no. We do have some technologywe're releasing shortly which is a very efficient video transcoder.So whether you're starting with MPEG or ASF file, we will besupplying a free piece of code to the net where it migrates tostreaming media format.

Q: Is this a downloadable application?

A: Yes. Initially it will be [Windows Media] ASF based. It will becalled the POPcaster, by the way. But we will be supporting allformats.

Q: Right now it seems you only support Windows Media.

A: Windows Media and MP3. But RealVideo and QuickTime--we haveeverything worked out. The network is enabled and those serviceswill be turned on in the next week or two. We're just doing somefinal load testing on the network.

Q: So this is for on-demand only?

A: It will be for live, shortly. Our backend control mechanism iscreated with many business opportunities as its enabling businessmodels. And we're rolled out on-demand first, but we will beoffering live access for an upgrade fee. We'll probably be releasinglive around Q3.

Q: So what else is in the plans?

A: We believe this is a very large revolution in webcasting. It putsall existing webcasting models into question. On price pointdelivery, on enablement factors. You know at the end of the day,this is like the consummate democratization of the 5 million-channeluniverse. Everyone has immediate access to webcasting without evenhaving to give us a phone call.

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