One Anti-Piracy System to Rule Them All

Hollywood appears to have a preliminary winner in its bake-off of anti-piracy technologies.
For the last year, the film industry, through its Palo Alto-based R&D joint venture MovieLabs, has been testing a dozen so-called “digital fingerprinting” technologies. The technology purports to scan file sharing sites, Internet providers and peer-to-peer networks to identify copyrighted material.

“Fingerprinting Performance” (Leonard Kleinrock, 2007)

Yesterday in Los Angeles, people affiliated with the Motion Picture Association of America talked about the ongoing tests at a day-long anti-piracy workshop that the MPAA co-hosted with the University of California. In his introductory keynote at the event, UCLA professor and Internet pioneer Leonard Kleinrock showed a single slide that suggested that one of the anti-piracy filtering companies had outperformed the other 11, with the highest number of matches of infringing content and lowest number of false-positives. But professor Kleinrock and MPAA execs declined to name the participating companies or who had scored best on the test, saying that secrecy was a precondition for their participation in the tests.

Nevertheless, afterwards, executives from Santa Clara, Calif-based Vobile were crowing in the hallways of the Universal Hilton Hotel.
The two-year old company’s technology, called Video DNA, has apparently bested others from the Royal Philips Electronics, Thomson Software & Technology, and the highest profile digital fingerprinting company, the Los Gatos, Calif.-based Audible Magic, which has deals to filter video sharing sites like YouTube and Microsoft’s Soapbox.

Movie Labs stress-tested the anti-piracy systems by loading hundreds of hours of copyrighted video content into the databases of the various filters, and then by flooding them with thousands of video files, some distorted, darkened and cropped, to try to scuttle their ability to find matches.
In the next phase of the ongoing tests, MovieLabs will see if the systems can handle ever larger quantities of copyrighted works. Theoretically, adding more songs, TV shows and movies in their databases could slow down these systems—and the Internet video sites that use them— since it could take longer to find possible matches.
MovieLabs has been sharing tests results with its member movie studios since the summer. MovieLabs chief executive Steve Weinstein says the technology is ready for prime time. “In a year you’re going to see many Internet companies using it. This technology has shown its viability.”

Full story at The New York Times

Another article in LATIMES

Branded and Video Advertising Key to Future

Online ad spending will expand 28.6% this year, according to eMarketer CEO Geoff Ramsey. Next year, digital ad spending will increase 32%--amounting to nearly $28.8 billion.

Web videos are watched by 72% of Web users--or 135 million people--every month.
Ad spending around them is set to hit $775 million this year, and $1.3 billion by next year.

Asterpix Says Forget Hypertext, Think Hypervideo

One of the great things about the Web is the ability to link to a Web page, or a part of a Web page, from anywhere. Asterpix, a San Jose, Calif.-based startup, wants to bring that same ease of use to the world of video. The company’s technology -– which it calls hypervideo — gives authors the ability to link directly to objects displayed inside video clips.

These so called hotspots track the “objects” linked throughout the entire video clip. So for instance, when explaining the Coverflow features of the iPhone, one can link directly to the relevant point in the video right from the blog post. Hotspots are designated with blinking circles; click on them in the video to access the author’s notes, tags and target links.

The service doesn’t require you to download separate software on the desktop. Simply sign up and embed the videos as you would from any video source such as YouTube, MetaCafe, or Blip. Asterpix adds a separate invisible layer on top of the video that contains all the metadata (aka relevant linking information). Then just go ahead and drop it in your blog or on your MySpace page.

Asterpix is less than a year old and is backed by New Enterprise Associates; so far it’s raised $4 million in one round of financing. CEO Nat Kausik, who in his past life created a handful of successful networking-related startups, told us that in order to gain traction, the company will initially adopt a widget strategy. He feels that MySpace and other social networks are going to be fertile ground for his service. He was also candid enough to say that the business model of this company is evolving.

Asterpix’s technology could have big implications for online video-related advertising as it would allow advertisers to embed hotspots around products of high commercial value. For instance, Le Bron James videos could link his shoes to Nike (NKE) stores, or Tiger Woods clips could help push golf clubs or even apparel.

“Every object is now clickable and searchable,” says Kausik. Google AdWords, for instance can drive traffic right to the relevant spot in a video clip, giving people a sense of what they are buying. “We hope this will help unlock the monetization of video.”

Among the existing players in this space, Eline Technologies of Vancouver, B.C., is doing brisk business with its VideoClix software. We also recently covered Delivery Agent. Others, such as Tandberg and Microsoft (MSFT), are working on their own hypervideo technologies — all in hope of unlocking the ad potential of online video.

P2P responsible for as much as 90 percent of all 'Net traffic

P2P traffic is dominating the Internet these days, according to a new survey from ipoque, a German traffic management and analysis firm. ipoque's "preliminary results" show that P2P applications account from anywhere between 50 percent and 90 percent of all Internet traffic. The final survey results are not yet available and will presented at the Emerging Technology Conference at MIT later this month.
Leading the way is BitTorrent, which has surpassed eDonkey as the P2P protocol of choice. During the last year, BitTorrent accounted for between 50 percent to 75 percent of all P2P traffic, with eDonkey coming in second at between 5 percent and 50 percent. The wide variance in the figures is due to local preference, according to ipoque: in some parts of the world, eDonkey still reigns supreme when it comes to P2P traffic.
ipoque's data appears at odds with that of Ellacoya Networks, a company that makes deep packet inspection gear. The company said in June (see below in this post) that P2P traffic accounts for just 37 percent of North American traffic, compared with 46 percent for HTTP traffic. Of that 46 percent, over a third consisted of streaming video, à la YouTube.
Despite the differences in how the traffic is broken out, ipoque and Ellacoya's data both illustrate the degree to which users' desire for video is affecting the Internet. It seems safe to assume that much of the P2P traffic reported by both firms is video. Combine that with the surge in traffic to YouTube and other video sites, as well as the official upcoming launch of Joost, and it paints a picture that some ISPs will find disturbing: demand for high-bandwidth applications like video is increasing. That's why ISPs are so interested in deep packet inspection and other traffic-shaping tools.

********************************

Ellacoya Networks, makers of deep packet inspection gear for carriers, has pulled together some statistics on one million broadband users in North America, and its findings show that HTTP traffic accounts for 46 percent of all broadband traffic. P2P applications now account for only 37 percent.

Chalk it up to YouTube and other Internet video sharing sites. The surge in HTTP traffic is largely a surge in the use of streaming media, mostly video.
Breaking down the HTTP traffic, Ellacoya says that only 45 percent is used to pull down traditional web pages with text and images. The rest is mostly made up of streaming video (36 percent) and streaming audio (five percent). YouTube alone has grown so big that it now accounts for 20 percent of all HTTP traffic, or more than half of all HTTP streaming video.
Looking over all the numbers, one of the most surprising result is the continued success of NNTP (newsgroups) traffic, which still accounts for nine percent of the total. Clearly, newsgroup discussions (and, ahem, binaries) are still big business.
The data may provide some ammunition for companies that favor traffic shaping on their networks. Between P2P, newsgroups, and streaming HTTP video traffic, the vast majority of Internet traffic is non-critical (i.e., no one's going to die or lose $20 million if they don't download a YouTube clip or a new song in under a minute). Networks that want to ensure priority transmission of VoIP calls, traditional HTTP web browsing, medical imaging, etc., have a strong incentive to throttle back that flood of non-critical traffic when the network is experiencing heavy loads. That could bring them into conflict with proponents of strict network neutrality, though, who don't want to see any sort of packet prioritization.

Thomson Acquires Distributor

Thomson SA has acquired SyncCast Corp., a wholesale distributor of online movies, music and other entertainment, as part of an effort to boost its own digital-services businesses. The price wasn't disclosed.
Through its Technicolor services division, Thomson is trying to win more business from studios and distribution companies as they increasingly move toward digitization of key processes such as creating masters and delivery.
Thomson, of France, has been building an end-to-end system to cut the time and steps required to prepare movies, television shows and other content for distribution. Using the company's new arrangement, preparing a movie for TV, for example -- including changing proportions to fit a TV screen, adjusting the resolution, and making the appropriate number of copies -- might take 25 hours, compared with 100 hours without the integrated digital processes it has put in place.
The new system, which officially begins today, "allows studios to distribute their content faster," says Chris Carey, chief technology officer at Technicolor. Acquiring SyncCast, Anaheim, Calif., which delivers content on behalf of online retailers such as Microsoft Corp.'s Xbox Live Video Marketplace, will help Technicolor bolster its offerings in consumer-targeted businesses.

Video Funding: Dailymotion Gets $34M

PARIS -- Dailymotion SA has secured $34 million in venture-capital funding that will allow the French start-up to expand its video-sharing Web site as it competes against larger rival YouTube, owned by Google Inc.
The company's new funds come from venture-capital firms Advent Venture Partners LLP of London and AGF Private Equity of Paris, a division of Allianz AG. Dailymotion already had raised about $9.5 million in October from venture firms Atlas Venture and Paris-based Partech International.

In April, Dailymotion had 4.7 million unique video streamers in the U.S., while Metacafe had 3.7 million. By contrast, Google sites (including YouTube) had 131.9 million unique video streamers in May.

Bi-Weekly wrap up, 16-31 August

This summary is not available. Please click here to view the post.

Online Video is Still Too Expensive

There are a number of ways to deliver digital video content, and delivering that content online is the most expensive of them all. How expensive? Dan Rayburn recently took a look at CDN pricing, and while it is on the downswing, it’s still pretty expensive. For example, a customer who buys 100 terabytes at $0.15 a gigabyte would have to pay around five dollars in bandwidth to serve 1000 views of a three minute video. That means they’d have to get at least five dollars in CPM (cost per thousand) advertising just to break even, and that doesn’t include storage costs.

Top 10 Video Search Engines

Here is a top 10 Video Search engines:

blinkx
clipblast!
dabble
everyzing
exalead
Fooooo
metacafe
pixsy
PureVideo
VidSea

Analyzing YouTube's Revenue Potential

Full article

So, Google's YouTube will finally sell video ads. How much revenue will they generate?

Let's run the numbers.

- YouTube is testing overlay ads that run along the bottom of videos. If viewers click on these ads, the videos they are watching will pause, and the ad will launch.
- YouTube will only run ads on videos from signed content partners (for now).
- In tests, approximately 75% of viewers presented with an ad chose to watch the whole ad.
- Google plans to begin by charging a $20 CPM.
Combining this information with Comscore's finding that YouTube streamed 1.7 billion videos in May, we can construct a basic range of revenue estimates.

ASSUMPTIONS
For our initial scenarios, we make the following assumptions:
- Google streams 2 billion videos a month (up modestly from the May numbers)
- A sub-set of this group are from content partners and will eventually have ads (we'll run a range of 10%-50%)
- A sub-set of this group will have ads that are actually watched (we'll run a range of 33%-75%.
- In tests, 75% of videos were watched, but this was likely heavily influenced by the curiosity factor. In the early banner ad days, banner click-through percentages were high, too).
- The ads will be highly targeted, full-motion video, and should therefore command a high CPM (we'll run a range of $10-$50).

RESULTS
We ran five scenarios, from Conservative to Aggressive (please see this page for details). In the Conservative scenario, YouTube generates about $8 million in revenue, less than 1/10th of one percent of Google's overall revenue ($16 billion). In the Aggressive scenario, the company generates about $450 million of revenue--enough to make a meaningful contribution, but barely.

FIVE YEARS FROM NOW
We also ran scenarios using a far higher number of monthly streams (range: 10 billion to 50 billion), a greater percentage of ad penetration within videos (range: 50% to 70%), and a similar percentage of ads watched as in the above scenarios (range: 33% to 60%). Here, the revenue is far more meaningful. In the Conservative scenario, YouTube generates $200 million of revenue: nice, but nothing to write home about. In the Aggressive scenario, however, the company generates $13 billion of revenue--closing in on Google's current revenue today.

BOTTOM LINE
In short, YouTube's revenue won't likely be material to Google for at least a year or two and possibly more. The impact on the bottom line, moreover, will probably be even less pronounced: Serving a video ad, even for Google, is far more expensive than serving a text link. At a $20 CPM, the gross margin on such ads will likely be well below Google's current margins.

Bi-Weekly wrap up, 1-15 August

* Veoh Seeks Court Protection From Universal Music Copyright Suits
San Diego - Video-sharing site Veoh Networks announced on Thursday that it has filed a pre-emptive legal action against Universal Music Group, asking a judge to declare that its service does not violate copyrights.
* NBCU/News Corp. Web Video Venture Gets $100 Million From Equity Firm
San Francisco - The online video distribution joint venture between News Corp. and NBC Universal ("New Site," for now) has received a $100 million investment from private equity firm Providence Equity Partners, in exchange for a 10% stake, The New York Times reported, citing people with knowledge of the deal.
* File-Sharing Firm Lime Wire Debuts Digital Music Store
New York - Lime Wire, the company that distributes the LimeWire peer-to-peer file-sharing application, has announced plans to open a digital music store.
* Video Transcoding Firm RipCode Raises $10.5 Million
Dallas - RipCode, a developer of video transcoding technology, announced on Tuesday that it has raised $10.5 million in its second round of financing, led by ATA Ventures.
* SpiralFrog Debuts Beta of Ad-Supported, Free Music Download Service
New York - SpiralFrog, an ad-supported free music download service, has quietly launched an invite-only beta test of its service, CNET News.com reported.
* German Prosecutors Stop Identifying File Sharers on Behalf of RIAA
Offenburg, Germany - The Local Court (AG) in Offenburg has prohibited a local public prosecutor's office from obtaining the personal data from an ISP that match the IP addresses of alleged P2P network users citing citing "obvious disproportionateness”.
* Japanese Firms Demand YouTube Remove Copyrighted Videos
Tokyo - After a second meeting with executives in Tokyo with YouTube and Google this week, a group of Japanese rights holders again demanded that their copyrighted material be removed from YouTube, the Associated Press reported.
* HandHeld Entertainment Acquires eBaum's World for $17.5 Million
San Francisco - HandHeld Entertainment, a maker of portable media players and operator of entertainment websites, announced on Thursday that it will acquire eBaum's World, an entertainment site that offers user-generated videos, games, jokes, photos and other content, for $17.5 million. The site generated $5.2 million in revenue and $1.6 in net income before taxes in 2006, and has an average of 10 million unique visitors per month. HandHeld had already bought another video site, Putfile.
* Video-Sharing Site GoFish Terminates Acquisition of Bolt Media (details in the previous post)
New York, N.Y. - GoFish, a San Francisco-based video sharing site, on Thursday called off its planned $30 million acquisition of New York-based Bolt Media, after Bolt was unable to finalize a settlement in a copyright infringement lawsuit.
* EMI Shareholders Accept $4.8 Billion Buyout Offer from Terra Firma
London - Major record label EMI Group announced that its shareholders have approved a $4.8 billion buyout offer from private equity group Terra Firma.
* Apple's Wozniak Among Backers of Internet Video Start-up Hotswap
New York - Hotswap.com, an Internet video start-up founded by three former University of California grad students, has raised an undisclosed sum of funding from backers including Apple co-founder Steve Wozniak and Clear Channel co-founder Red McCombs, Reuters reported.

Video: Google finds more MP3s than Limewire

God bless user-generated service journalism. This video, by a 21-year-old student named Jimmy Ruska, explains how to use Google to quickly and efficiently find music files. The video has been viewed over 400,000 times since it was posted in April.

Google Hiring Shows Video Key to Growth

The $1.6 billion buyout of YouTube was a good indicator that Google, the Mountain View, Calif.-based search giant had serious designs on the online video business. Its recent moves, including a partnership with Apple, are signs that it will keep investing. More anecdotal proof that the $10 billion-a-year company is betting the farm on video, take a quick look at their job listings.

At present Google has about 2,800 open positions right now, and a large percentage is related to video. There are numerous postings for online video ads, video content analysis/search, and TV initiatives. The television-related positions show the company is beginning to look at convergence very seriously. Television-related positions are based in London.

Yahoo is no slouch either, and has been aggressively hiring video related personnel, according to UBS analyst Ben Schachter, who recently published a report analyzing the hiring trends at the two Internet giants.

Video search company, Blinkx, blows bubble with IPO

Blinkx the San Francisco video search engine, has taken us into new bubble territory, going public on the London Alternative Investment Market (AIM) and being valued at $355 million.
It raised about $50 million.

Its IPO is perfectly timed, because it hits all the hype buttons: Blinkx is search, it is video, and best of all, it is online advertising — an industry where the merger activity is at its most frantic levels since Cisco, Nortel and Lucent binged on billion-dollar infrastructure companies at the height of the last bubble.

Blinkx’s technology takes a video’s content — the spoken words within them - and translates it into searchable text, which is something different from what most sites do. Pluggd and others translation services are making headway in this area. It is powering video search for a Lycos, Looksmart and a division AOL.

Blinkx, meanwhile, tell they’re in this for the long haul, and they think they can make money by serving targeted advertisements.

Politicos take on YouTube, video's future

WASHINGTON--It was an atypical start for a Capitol Hill hearing--arguably the first time a politician ever paused his opening remarks to grab a digital video camera and capture the scene around him for a few seconds.

"I thought we could have the first ever YouTube video of a committee hearing from the chairman's perspective," Rep. Edward Markey (D-Mass.) said as he aimed the palm-sized silver gadget at a table lined with video tech executives, including YouTube CEO Chad Hurley, billionaire investor and HDNet founder Mark Cuban, and the CEOs of Slingbox and TiVo.

Other witnesses included the creator of the hit television series Everybody Loves Raymond and executives from the Disney and ESPN networks and Qualcomm's MediaFlO unit, which recently rolled out live TV capabilities for mobile phones.

The purpose of the morning meeting was to explore the future of video.
But it quickly became apparent that the hearing wasn't just a playful show-and-tell for the companies represented, as some politicians proceeded to put YouTube in the hot seat over its copyright policies.

full article here

Internet TV company, Joost, raises $45M

Internet TV company Joost has raised $45 million in a whopper round of venture financing, giving it a significant war-chest to spend just as its product hits the market.

Lead investors were Sequoia Capital and Index Ventures. CBS Corporation, Viacom and the foundation of Chinese billionaire Li Ka-shing also participated.

Despite being relatively untested, Joost has gained publicity because it was started by Skype co-founders Janus Friis and Niklas Zennström. It has signed deals with several companies, including Viacom, CBS and Time Warner, to carry their content.

U.S. Video Startups Raised $682M Last Year

It amounts to a hill of beans and then some. U.S.-based video startups gathered $682.17 million in venture capital funding in 2006, according to statistics gathered by Dow Jones/VentureOne.

The amount was spread across both infrastructure and consumer plays, 74 companies in total. It’s up 95 percent from the $350.05 million that 54 video-related startups raised in 2005.

And already, in the first quarter of 2007, some 19 video software and services companies have raised $210.7 million. Put another way, American video startups raised $1.96 million per day over the past 15 months. And there’s been one exit to write home about: $1.7 billion for YouTube.

Video "super-distribution" requires better ratings technologies

CBS announcement for online distribution

CBS is announcing today its own “Interactive Audience Network” to distribute free television shows such as CSI, Late Show with David Letterman, and Survivor through all sorts of online platforms. The network has made arrangements with AOL, Microsoft, CNET Networks, Comcast, Joost, Bebo, Brightcove, Netvibes, Sling Media, and Veoh to showcase its content, and Akamai to deliver it.

MGM & Apple

MGM Studios has signed a deal with the iTunes store to sell catalog titles but not new releases. The 24 new films bring Apple’s motion picture library up to a meager 500 films, which would make for a small video rental shop indeed. As Variety points out, the $9.99 price point for back catalog titles is more than bargain-bin DVDs like MGM’s Dances With Wolves might sell for otherwise.