Fear Of A MiKrosVft Planet

June 2nd, 2009 Davis

“I need not fear my enemies because the most they can do is attack me. I need not fear my friends because the most they can do is betray me. But I have much to fear from people who are indifferent.” - Russian Proverb

Now I know that most people don’t really care about the mechanics behind playing video files and I can’t say that I blame you for caring more about your content than the technology behind it, but while this post will get into some of the more mundane mechanics of the codec industry, I ask that you stick with me because behind the scenes a war is being fought for control of your very television.

This particular battle has been going on for over 10 years now and centers around something called a codec.

When J.D. Rockefeller set out to monopolize the oil industry, there were several crucial areas where he attacked. He knew that he couldn’t control all of the oil fields because it was literally bubbling out of the ground, but what he could control was the distribution method for getting oil to the end customer.

In building his monopoly he seized assets used to transport oil from raw material to the end consumer. Whether it was owning all of the oil pipelines, so that he could control what oil cost him, owning the railroads so he could dictate how far his competitors could reach or owning the distribution points where consumers bought kerosene to light their homes, he made sure that he had control over every aspect of it. This was good for Standard Oil investors, but wasn’t very good for competitors or consumers.

Online video may not seem like it has a lot to do with the oil industry, but if you look at it’s early development, there are many similarities. So much content is bubbling up that the real challenge isn’t finding video oil, it’s getting it to consumers. Instead of pipes, now we have internet access, instead of railroads there are CDN networks, instead of gas stations, there are operating systems ready to serve us 24 hours a day.

In all of these industries, competition has been limited to a handful of big companies, but the industry that I’m most interested is much smaller than any of these. In the grand scheme of things, codecs (and the filters that go along with them) are the refineries of the video world. They take digital signals and convert them into the flickering magic that appears on our screens. Consumers may not understand the technical details behind it, but they are a crucial chokepoint in your digital video experience.

This battle has been fought on many fronts, but in the end it always comes down to one issue. Those who think consumers should have a choice and those who think they know better. It’s about control over your entertainment experience. Who, What, Where, When, and How you are allowed to consume YOUR media. On one side, well funded corporations with huge financial stakes, on the other, an unorganized patchwork of misfit companies and an army of guerrilla volunteers desperately fighting for a better entertainment experience for all of us.

The war over how video is transmitted may not make it to the front pages, but how it turns out will be important for the success of digital video. In order to better understand how this battle is going, I reached out to interview one of the Colonels in this digital revolution.

Dan Marlin is the CEO and Co-Founder of CoreCodec. His company has built many of the tools necessary to play video files. Before starting his company, he worked for DivX and over the years has contributed extensively to the open source codec movement. He also sits on the board of the Matroska Foundation, an organization dedicated to enabling high definition digital video support for as many consumers as they can.

In our interview, we discussed the growing momentum behind the MKV format, his thoughts on DivX and the competitive landscape of the codec industry and had a passionate discussion around a controversial decision by Microsoft to prevent outside developers from using alternative filters in Window’s Media Player.

In regards to MKV, Marlin had many positives things to say about the momentum that they are seeing. When I asked him about interest in the format, he said that over the last 8 months, they’ve seen a “20 fold increase in the inquiries in regards to more details, about usage about enhancing the current feature set.”

This interest should mean good news for consumers. As more and more customers ask “where’s the MKV?“, hardware companies are starting to respond. When I asked Marlin about how long it would take before we see MKV reach critical mass he said,

“If you look at the adoption scale, you’d probably have to say that we’re at the Ubber Geek stage right now. It will probably take 2 - 3 years. We’re just starting to see the penetration now and it’s been three years since our last release. I would probably have to say two years. Not this Christmas, but the following Christmas you’ll probably start to see more devices.”

One of the more interesting things that came up during our conversations was some of the trends that Marlin is seeing in the MKV adoption curve. It’s no surprise that the anime community was one of the first ones to start using the technology, but I was surprised to learn that countries in Asia and Europe have been more enthusiastic in adopting MKV then in North America. In fact, the trends for MKV adoption mirror the original DivX adoption curve exactly. It’s almost as if the people who’ve been long time DivX users are the first ones to upgrade to an HD experience.

“Absolutely, as a matter of fact it’s mirrored exactly. You could look at DivX in the early days when I was there going back to 2001 and you can actually see the same adoption happening, the anime, the ripped releases from the AV heads, it’s mirroring it, but you have to ask why they are doing it? They are doing it because of the flexibility that it brings to what they’re doing. They can add, especially when it comes to some of the guys that rip DVD and the like and Blu-Ray, they kind of make it their own. They can add menus, there are menus out there that even though they are text, they do very basic things, but there can also be a ton of files inside the container itself, there are info files and pictures you can group.”

While Matroska was technically created by CoreCodec, Marlin told me that he has plans to spin it off into a foundation similar to Mozilla. They plan to offer sponsorships to companies that want to tap into their early adopter customer base. One of the things that I found fascinating throughout the interview was the openness behind such a transformative piece of technology. Instead of monetizing their creation, CoreCodec is building a business around the open source eco-system. Big media companies that believe you can’t build a business around “free”, would be well served in looking at how Core Codec has been able to position themselves by giving a good portion of their technology away.

“we looked at it not looking to make money and that wasn’t really the intention, but even what has been proven now and maybe not so much back then, open source and the ecosystem around open source, there can be profit. Even in a non-profit foundation or a not for profit foundation I should say, which the Matroska Foundation will eventually become, you know is pretty much the same thing. You still can be profitable and make money to support what you developed.”

When I ask Marlin about his thoughts on DivX and how they are positioned in the codec industry, his thoughts were bittersweet, “it’s a love-hate thing.” On one hand, having DivX adopt the MKV container does a lot towards making it a standard. It also helps to speed up the amount of time it will take to get into hardware devices. On the other hand, not a lot has changed since DivX and XviD split paths and now that the open source movement has taken the upper hand, he doesn’t like to see confusion between X.264/MKV and DivXHD.

“Obviously they’ve rethought what they had to do with H.264 which is a migration, but they’re not providing anything of value to what’s already out there. As a matter of fact, it brings more confusion than anything else and that’s the frustrating part because they have their own eco-system with certification and us as a solution provider like with CorePlayer or the CorePlayer platform itself is working with third party OEMs and they are asking questions in regards to DivX and DivXHD and we say the same thing we’ve been saying all along. DivX is Mpeg video and DivXHD is AVC video.”

Of all the topics that we discussed though, the most controversial was the decision by Microsoft to restrict how third party filters work within Windows media player.

To fully understand the issue, you need to know how your computer reads media files. When you click on your file, filters take a look at that data and tries to figure out what to do with it. If it’s audio, they’ll send the data to an audio decoder so your soundboard can play it. If it’s video, then it gets sent to a splitter where the audio stream and video stream are separated. From there a decoder looks at the video data, decodes it and sends it to a renderer for display on your screen.

The controversy revolves around how Microsoft prioritizes filters when you play back content. Currently, if you have several filters installed that can all handle the same job, WMP will look at the merit value of each filter and give preference to the highest one. Since you have the ability to prioritize which filters you want your computer to use, it allows you to create the ideal settings based on your hardware.

This comes in handy if you’re trying to play H.264 video in WMP and it happens to conflict with your video card. Since the user has control over the priorities, you’re able to create a better (more credible) configuration.

With the Windows 7 RC, Microsoft has taken away your ability to prioritize which filter you can use. From their perspective, they get a ton of complaints about filter problems and by making it a closed system it improves the experience for their customers. For the codec industry though, it will reduce the incentive for engineers to continue to work on filters because Microsoft has just essentially seized the entire filter market.

Microsoft will argue that because they allow people to install whatever filters they want on their own media players, that this restriction is somehow reasonable. After all, they’re not preventing customers from downloading another media player and configuring the settings anyway you like, they’re controlling their own product.

The problem with this argument though, is that while consumers have shown that they’re willing to download a codec, by and large, they’ve been very reluctant to download an entire media player. It’s a big commitment to mess with the default settings on Windows and because Microsoft bundles a copy of Window’s media player into every operating system they sell, it drastically minimizes the potential market that companies like CoreCodec, DivX and Nero can serve. This ultimately leads to less investment in codec technology and lower quality video for consumers in the long run.

Take a look for yourself at a real life comparison between video played using Media Foundation’s preferred filters and an open source combination. While the differences may be subtle, there is clearly better focus and definition in the open source solution. It might not be much, but it makes a huge difference when you put it on a 60″ screen. Today, you’d have the option of recreating the ideal settings in WMP, but with Windows 7 Microsoft is now in control.

While Marlin wouldn’t go as far as to accuse Microsoft of using their dominance over the operating system as a way of stifle third party codec competition, he did agree with me when I suggested that this may have more to do with preventing competition then securing their media player for consumers.

“You said it I didn’t, but essentially when it comes down to it, that’s what it is. It’s just frustrating that we all have to go through what we have to do and they could have provided an integrated solution without having to lock out third parties. Period.”

Now we can argue over whether or not Microsoft had an evil intent when they choose to shut down part of the codec industry, but regardless of the motives, competition is hurt by their decision to close media player to third party vendors. When I asked Marlin whether this would hurt his company or whether it was a dam in the river that would fork around the issue, he had conflicting thoughts.

““I think it’s going to be both. Microsoft will probably tell you that there is no problem and then the Core people will fork around it, but you’ve got to question the value of it though. You could still have embedded DirectShow filters, why have them under media foundation?”

Later on in the interview he extrapolates,

“I would say that as long as the default decoders are not set as the default and can be overwritten, I think we’re OK. The question is what steps will you have to go through and will Microsoft allow those steps. Right now you can edit it, they posted the solution online, but Microsoft could bypass that solution with the next RC. So that’s kind of like a wait and see thing. It does affect our business though, it does affect DivX’s business, it affects everyone’s business. “

Now Microsoft is free to run their business in anyway that they see fit and while the issue over filter compatibility within WMP may be an inch in the grand scheme of things, with each inch consumers lose a little bit more control. What’s so surprising to me about Microsoft’s behavior though, is how bold their actions are given the current regulatory climate.

Someone should nominate them for Alpha Dog of the Week because it takes giant brass balls to use your ability to bundle software, in order to shut down an entire industry, while you’re being accused accused of abusing your monopoly by bundling software within the operating system. If the EU understands even a little bit about codecs, I would expect them to be up in arms over this issue because it essentially proves the argument that they’ve been trying to make. Microsoft’s dominance in the operating system is having a detrimental effect on competition in other areas of the software industry.

It could very well be that Microsoft has good intentions here, but given their long history of doing whatever it takes to gain control of the codec industry, I can’t believe that this is by happy accident. This is a company that just spent a ton of money to exclusively webcast the Olympics in their Silverlight codec. The lack of MKV support in Windows 7 prompted the Hack 7 MC blog to write that “Microsoft’s support of the format is borderline neglectful.”

The decision to interfere with the priority filter settings is so Machiavellian I still don’t know what to make of it. My cold banker heart says yes! yes! yes!, but the consumer in me says dear God no. While I understand that these issues are hard to figure out and that there are many ways to look at them, I hope, for the sake of the entire codec community, that Microsoft will rethink their decision to exclude third parties from Windows media player.

For a complete transcript of my interview with Dan Marlin, please click here.

Posted in DivX, Matroska, Media, Microsoft, SA, Technology, VOD | 1 Comment »

Where’s The Beef? Filtering Cats For Content

March 25th, 2009 Davis

If you ask the big content owners, they’ll argue that the only content on YouTube has either been stolen from them or is some kind of a lame cat video uploaded by your crazy neighbor. Unfortunately, in my seemingly endless quest to collect and document the best cat videos on YouTube, I keep getting distracted by some pretty amazing independent content producers. Here are ten of the artists who’ve impressed me the most, over the past few months.

Wicked Awesome Films - Kevin & Bobby create movie trailers of pop culture events. Whether they are remaking the latest films, riffing on popular internet memes or teaching underaged kids how to get alcohol, their quick 2 minute clips will keep you entertained and laughing. They tend to be a little over the top and crude at times, but that’s a big part of their charm. They are usually NSFW so be forewarned, but if you enjoy listening to shock jocks on the radio, you’ll love their videos.

Jack the Danger Bunny - Filmed in a style that is part documentary, part sitcom, and pure genius, Cait and Dan share moments of their dysfunctional relationship with the rest of the YouTube community. If their relationship in real life is anything like the show, I’m not sure how long the series will be around, but take advantage why you can because their silly antics make for some of the best videos on Youtube.

The Big Time Show - Gabe and Dave moved to Hollywood with a dream to make it big. Along the way, they’ve been documenting their progress towards trying to break into the world of show business. They’ve got the looks, are willing to work hard, sell themselves out and have no shortage of motivation. The only problem is that they seem to be lacking talent. Filmed as a reality TV show, their videos take a satirical look at the movie business and features a wacky cast of characters including their sleeze ball agent, a clueless photographer and a student director who isn’t even willing to cast these guys in a student project unless they’re willing to pay him. If you’ve ever wondered how bad b-movies end up making it to the big screen, this mockumentary provides all of the answers. Spinal Tap fans will especially love this series.

Scenic Videos - I tend to prefer watching Youtube online vs. taking advantage of it on my TiVo, but the Scenic Video channel was made to be displayed on a big screen television. They film relaxing nature scenes and let viewers play them in the background. If you play their clips while you sleep, you’ll have fantastic dreams. Most channels get attention by flashing lights or using loud buzzer sounds, but the low key nature of their videos is what makes this channel really stand out.

Rejected Jokes - This sketch comedy channel is produced by Ben Schwartz, a writer who has worked for Letterman, SNL and Robot Chicken. While not every one of his jokes ends up on television, his unique blend of dark humor fused with pop culture leaves you laughing even if his YouTube jokes are the leftovers. Sometimes Schwartz will do a stand up routine, while other times the skits are a little bit more complex, but either way they’ll make you smile.

Daneboe - Whether your watching his award winning expose on the Kool Aid serial killer or his LegoMan job inquiry, Daneboe’s Gagfilms will keep you entertained with his seemingly random videos. He doesn’t produce a ton of content, but when he does it tends to be very high quality. It’s one of my favorite channels for when I need to quick bite of comedy.

Visible Mode - Watching the Visible Mode channel is kind of like watching a car accident in motion. You know it’s terrible, but you just can’t stop your self from watching the destruction. Visible Mode has some pretty crazy ideas, but his demented sense of humor is a good fit on YouTube. After watching his experiments at bringing the combover back in style, I feel much more comfortable about my own receding hairline.

Timbotantrum - This channel is producing the excellent LA I.C.E. web series. It’s about a couple of immigration agents trying to clean up the streets of LA. In addition to the series, Timbotantrum also produces some very funny clips that tend to mock the pop culture we live in.

Sloncekandrej - Sloncek is a legend in the P2P community, but is relatively unknown on YouTube. At one point, his website SuprNova was the most popular torrent site on the net. Sadly, it all had to end after he started to receive a little too much attention in the local Slovenian press. After shutting down the site, he gave the domain to the Pirate Bay and started focusing on making videos instead. Recently, he’s been working on an excellent P2P news vidcast with Torrent Freak. The program is very professional and is a bit like watching the local news for people who care about P2P.

Beet.tv - Beet.tv is a good example of what modern TV studios must do if they want to succeed amidst the fragmentation of the internet. Most of their videos are interviews with influential people in the tech community, but they’ve also begun to cover other industries like healthcare. After filming and editing unique niche content, they then hyperblast it through a distribution system that includes sites ranging from MySpace to the New York Times. The combination of high quality unique content and fragmented mass distribution has worked out pretty well for them so far and I’m optimistic that the model will prove to be successful. Viral stories don’t always have the same immediate punch that you get from live TV, but if they end up being seen by just as many people, it can be even more powerful than traditional television.

Posted in Media, TV, VOD, Web 2.0 | 3 Comments »

Comcast Targets Innocent Customer In P2P Dragnet

January 29th, 2009 Davis

CNET reported this morning that AT&T and Comcast are planning on adopting a three strikes and you’re out policy for P2P users. The move is yet another desperate attempt by the media industry to try and regain control over content distribution. Because most broadband providers have government protected duopolies, they hope to use the MSOs as a chokepoint in their war on privacy piracy.

If you don’t actively engage in P2P sharing, you probably don’t think you need to worry about this, but I think there are already reasons to be alarmed. Even before the program’s launch, we are seeing reports of innocent customers being targeted by Comcast’s DMCA enforcement division.

Recently, John Aprigliano received a letter from Comcast asking him to take down a torrent that he was allegedly seeding. As if hitting him with a bogus DMCA takedown request wasn’t bad enough, Comcast had to insult his taste in movies by accusing him of sharing Cadillac Records, a movie that he had never heard of BTW.

When he called Comcast to figure it out, he got the usual run around. After 4 different telephone calls and an hour of hold time, he was finally able to determine that Comcast sent him the notice because of an old modem that was now being used by someone else.

I find this scary because I tend to move around a lot. Over the course of my life, I’ve easily used ten different modems. Considering how popular Bit Torrent is, there is more than a good chance that one of my former modems is being used pirate media. Why should I now have to worry about getting kicked off the net, just because Comcast can’t tell the difference between an IP and MAC address?

In John’s case, he was fortunate to be tech savvy enough to catch this, but what happens when some little old lady loses her broadband just because of a Comcast screw up? Are most people really going to know that they need to ask Comcast, what they have down for their Mac address? Somehow, I doubt that my Mom would have been able to prove herself innocent in the same situation.

During the RIAA’s lawsuit blitz, there have been plenty of examples where they filed lawsuits against innocent “infringers”. Now the media industry wants to exploit government granted monopolies, in order to take away high speed internet from those same victims. Forgive me, if I’m more then a little pessimistic. Why Comcast or AT&T would even consider such an anti-consumer proposal is beyond me, but the whole scheme is doomed for failure.

The pirates will eventually figure out even better ways to encrypt their traffic and the end result will just be a bunch of ticked off consumers feeling like big brother is breathing down their neck. It’s hard to get excited about having Comcast monitor P2P activity, when they already have a history for screwing these things up.

Posted in DRM, Media, SA | No Comments »

Your Movie Wish Is Jinni’s Command

January 26th, 2009 Davis

For those of you who are still not satisfied with the current crop of movie recommendation services, you’ll soon have a new choice available to you. Last week, I signed up for the private beta of Jinni and have been pretty impressed so far. Jinni is a new interactive movie rating website that is trying to do for movies, what Pandora has done for music.

While the site doesn’t stream any of the films that they recommend, they do offer convenient links to places where you can find the films online (Netflix, Blockbuster, Hulu, etc.) Apparently, the company has been live for a few months now, but I only just found out about them last week after seeing a review of the service on Read Write Web.

The site includes reviews, photos and even trailers for each film in their database, but their movie filtering software is the real bread and butter. Most of the content you’ll find on their movie description pages is pretty much available on any of the other movie sites, but their “movie genome” information is exclusive to them.

Through a process of human and computer intervention, they’ve categorized every film in their library using information from the movie’s plot, mood, genre, time period, critic reviews, story type, and attitudes. Viewers are then able to filter their search results by using these definitions.

For example, a search for the term bank brings up 134 movies, but if I filter this list by looking only at the “witty” films that include a heist in their plot and are set in the 21st century, I’m able to narrow my search down to just three films, Criminal, Inside Man and High Heel’s and Low Lifes. Since I haven’t seen any of these movies, it’s hard for me to tell how effective this really is, but by narrowing down broad based searches, it does enable me to discover movies that would have gotten lost in the volume of other search results.

On Jinni’s website you can find more information on the actual genome mapping process.

“The starting point of the Movie Genome is manual tagging by our team of film professionals. Each title has around fifty genes, among thousands of possibilities. Then, using advanced machine-learning technology, Jinni’s system learns from the manual tagging to begin automated tagging. This creates a level of consistency that creative human taggers can’t reach - especially important for similarity matches and recommendations, which won’t work unless you compare apples to apples and battles to battles as often as possible. Users who vote on genes, as well as the Jinni team, constantly check and improve the machine tagging.”

After playing around with the site, I was really impressed with the user experience, but I’m still on the fence about whether or not Jinni’s approach is the right way to go. On one hand, by creating “genome” fields around each film’s “DNA”, they’re able to accomplish a lot more with the data, but on the other hand, by restricting rating population to just their staff, it also limits the number of films that they are able to catalog. As an example, if I do a search for the plot Psycho, I get 270 results, but the same search on the user driven site Spout, gives me 509 movies. Now I’d be willing to bet that Jinni’s quality is better then Spout, but by not allowing their users to tag films, they may be giving up quantity through their process. Some people prefer quality over quantity, but I can’t help feeling like they are missing out on the wisdom of the crowds by excluding users from participating in the genome mapping process.

In addition to their movie filtering technology, Jinni also allows you to share more information about your own movie tastes and they provide personalized recommendations. While I haven’t tested the quality of their movie recommendation service yet, I do plan on putting them through my own blind taste test to find out how accurate their ratings really are. In the meantime, if you’re interested in trying the service, feel free to apply to their private beta or you can leave me a comment and I’ll be happy to share one of my invites with the first 10 readers to respond.

Posted in Disclosure - I own stock in co. mentioned, Media, Netflix, Search, TV, VOD, Web 2.0 | 7 Comments »

Uverse Or UDiscrimination? AT&T’s Fiber Rollout Increasing Digital Divide

January 12th, 2009 Davis

As long time readers know, I’m a BIG fan of fiber internet access. I’ve only been fortunate enough to have access to the goods for 3 months of my life, but it was enough of a taste to know that fiber is a pretty disruptive piece of technology. While you may not need the the extra juice in order to find an on-ramp to the net, many of the more bandwidth intensive applications perform much better when you have a supersonic connection to the information highway.

Yet, despite all of the advances in technology, the rollout of fiber access has been painfully slow. AT&T likes to brag that they now offer Uverse to over 17 million households, but after two years, they’ve still only managed to sign up 1 million subscribers. While 17 million households sounds like a pretty significant footprint, if you’re not in one of the higher tax brackets, you are probably still waiting for super fast internet access.

A Tale of Two Cities

A little over a year ago, I left my swanky downtown loft in San Francisco for a much more humble apartment in the heart of Oakland. A big part of the move was because I wanted to save money for a new business that I was starting. At first I was ashamed to tell people that I was living in the 510, but after spending a year in Oakland, I’ve grown quite fond of the neighborhood. We certainly have more then our fair share of violent crime, but if you take the time to get involved in the community, you’ll meet a lot of amazing people. Leaving San Francisco for Oakland meant that I had to give up my fiber connection, but at the time, I was hopeful that it wouldn’t take long before AT&T finished their rollout of Uverse in the Bay Area. Sadly, after researching Uverse’s availability, I don’t expect this to happen anytime soon.

According to ZipSkinny.com residents who live in my zip code make a median salary of $32,273 per year. 23.7% of the population lives below the poverty line and there are nearly 18,000 people per square mile living in my neighborhood.

While Oakland can be a rough place, smack dab in the center of Oakland is a small town named Piedmont. Piedmont may be less then 2 miles from my home, but their community is night and day compared to my own. Despite being surrounded by Oakland, Piedmont was able to create a separate town for their residents and as a result they have their own school district, police department and fire services. While people in Oakland are struggling to survive, the median salary in Piedmont comes in at $77,952 (over twice what my neighbors are making.) The percentage of people living below the poverty line is a more reasonable 4.9%, and the average density per square mile is a measly 5,700 people.

Now I can’t fault Piedmont residents for wanting to live in a good neighborhood, but when you compare both cities, the difference between them is pretty startling. While one city is known for it’s high drop out rate among teenagers, the other is known for their high SAT scores. One city has an extraordinarily large population of single mothers, the other has an extraordinarily large population of personal nannies. One city has limited internet options, the other has access to Uverse.

We can argue over whether or not it’s fundamentally fair that Piedmont has so many advantages, but it’s their access to Uverse that I take exception with. As someone who has first hand experience with the benefits of a super fast internet connection, I’ve been harassing trying to get AT&T to expand Uverse into my neighborhood since I first moved. So far they’ve been pretty unresponsive and downright uncooperative to work with, yet 2 miles away in Piedmont, they are going door to door signing up residents for their service.

If you ask AT&T (either their phone reps or their PR dept.) for a list of neighborhoods where they provide service, they’ll refuse to break down the data citing competitive threats. Since I knew that Piedmont was juiced up for Uverse, but that Oakland had been largely denied service, I wanted to take a closer look at the numbers, to determine whether or not this was part of a larger pattern by AT&T.

In order to test my theory that AT&T is discriminating against the poor by only choosing high net worth areas to rollout Uverse service, I painstakingly researched bay area availability by looking up individual addresses one at a time. To help track this data, I created a public spreadsheet showing all of the bay area zip codes where you’ll find (and not find) Uverse service. While my spreadsheet does not prove that AT&T is using demographic data to discriminate over who gets access to Uverse company wide, it does suggest that their selection criteria in the Bay Area could be favoring the rich neighborhoods over the poor. When asked for more data on their company wide rollout, AT&T’s public relations department more or less told me to kick rocks and refused to comment on their selection criteria for Uverse availability. While they are well within their rights to withhold this data from the public, when you consider all of the government assistance that they receive, it seems only fair that they be required to provide some transparency over how they are choosing who gets Uverse and who gets denied.

According to my research, the average median salary of Bay Area Uverse neighborhoods comes in at $75,486 vs the average median salary of $67,405 for neighborhoods without access. In neighborhoods where AT&T offers Uverse, 6.65% of the citizens live beneath the poverty line compared to 11.04% in non-Uverse neighborhoods. While you would think that it would be in AT&T’s best interest to offer service in some of the densest areas first, a quick glance at the data shows that the average Uverse neighborhood represents approximately 3,500 people per square mile compared to density of over 7,000 people in Non Uverse neighborhoods.

Encyclopedia Davis and the Case of the Missing Uverse

Perhaps even more perplexing then the discrepancy between the haves and the have nots, was the fact that I could not find a single address in San Francisco which has access to Uverse. While my phone calls to AT&T reps and their public relations department generated plenty of assurances that they were offering service in the city of San Francisco, after more then 200 address searches, I still could not identify a single San Francisco residence that had access to Uverse. Despite AT&T’s claims that Uverse is currently available in the city of San Francisco, their representatives were also unable/unwilling to provide me with a single address that is currently using Uverse. As a result, I’ve excluded demographic data from the city of San Francisco when running the calculations listed above.

What makes this issue such a controversial topic is that if you are one of the traditional cable providers and want to expand service to a local neighborhood, there are typically very strict guidelines on which neighborhoods you have to serve. Because cable agreements have been traditionally negotiated community by community, local city governments have been able to negotiate equal access for all citizens. There are plenty of examples where cable companies have tried to only service high net worth neighborhoods, but because of the local franchise agreements, local politicians have had the muscle to pressure the cable companies to treat all of their citizens fairly.

When it comes to the telephone companies, the rules are a little different. Two years ago, California approved statewide franchise agreements that allow the phone companies to pick and choose which neighborhoods they want to offer service. The result is a broadband system that rewards the rich while discriminating against the poor.

Normally, I’m content to let businesses operate in the best way that they see fit, but when it comes to the internet, I’m a strong proponent of open access for all. The net is a great equalizer for society. It doesn’t matter whether you are black or white, rich or poor, male or female, gay or straight, young or old. When push comes to shove, it’s the power of your ideas that matter online. Yet, when it comes to the speed of your connection, it would appear that the tax returns of your neighbor, play a large role in deciding whether or not you have access to the highest tiered speeds on the net.

Internet providers have a unique business model that tends to encourage natural monopolies. Because the barriers to entry are so high, incumbent providers have a big advantage over new companies trying to get into the game. When you consider that President Elect Obama has proposed some pretty large checks to the phone companies, it becomes even more important to ensure that AT&T’s rollout policy treats everyone the same.

While I recognize the need for AT&T to turn a profit on their investment, I fear that by discriminating against the poor, it will only increase the digital divide. If AT&T isn’t using demographic information in their decision making process, then they should be more open about the criteria they are using to decide who does and does not get access to fiber internet. If my data is correct and they are only rolling out Uverse to the wealthy neighborhoods, then this is an issue that should be addressed before giving them access to more public funds.

While I believe that the statewide franchise agreements were a positive step for consumers and the telecommunications industry, if we’re not careful we run the risk of creating a system that makes it even more difficult for the poor to succeed online. While there may not be the same adoption rates in Oakland as there are in Piedmont, it doesn’t mean that their citizens should have less opportunities. Instead of continuing to discriminate against the poor, I’d like to see AT&T provide more balanced access to all.

Posted in Media, Technology | 9 Comments »

Holy Flash Batman, DivX Brings Hulu To Your TV

September 6th, 2008 Davis

Earlier this week, Ubergizmo broke the news that DivX has officially updated their Connected software to include support for flash video. With 98% of the world’s computers already using flash, this may not seem like a big deal, but when you consider that 0% of the world’s televisions support flash, this really is groundbreaking.

Along with the update, DivX also released several plugins for their Connected device. These plugins add support for Vimeo, Daily Motion, YouTube and for the first time ever, Hulu all on your TV set. After playing around with the update, I created a video of the software in action. In the clip, I detail the basic features of DivX Connected and give you the very first look at Hulu Connected in action.

I hope to provide an even more detailed review in the future, but this news was simply too exciting to ignore. If you haven’t already checked out DivX Connected, I would encourage you to take a closer look. There are a lot of media bridge devices out there, but few of them have seen the kind of support that DivX has been able to generate from the open source community. Between the work that the community is doing with the Connected SDK and the work that DivX continues to do behind the scenes, they’ve managed to turn a very niche product into one of the most robust consumer electronic devices on the market without Connected customers having to buy new equipment. Considering that Connected has been out for less then a year, it’s remarkable to see how far the product has come in such a short time. I hope that you enjoy the video and that you’ll stay tuned for a more detailed analysis later on.

Posted in DivX, Media, TV, Technology, VOD | No Comments »

YouTube And TiVo - More Than Just A Purrrfect Combo

August 6th, 2008 Davis

I knew it was coming, but I finally received my 9.4 software update. The update includes a couple of UI improvements, but TiVo’s support for YouTube is what I’ve been drooling over.

The way it’s currently set up, you need to hit a lot of buttons to get at your favorite content, but thankfully, TiVo has said that that they are working on a way to sync it with your personal YouTube account.

One of the complaints that I often read about YouTube is that it’s just a bunch a cat videos. While it is true that the feline community has found their special crazy place on the site, I feel that this statement does an injustice to all of the hard working innovative filmmakers who are pushing the boundaries of the web. Don’t get me wrong there is a ton of junk on YouTube, but there are also some really talented people who are redefining the relationship between an artist and their audience.

The beauty of YouTube is that it provides a platform where all kinds of niche communities can develop. Cat videos may not be important to you, but to some people they are more compelling than anything on Prime time TV. The challenge is matching the niche demand with the niche producers.

When I was growing up, I only had access to three TV channels. Cable eventually gave me 100 channels to choose from, but even then there was nothing ever on. When TiVo came out it completely changed how I thought about “channels” and shifted the equation from 100 programs to choose from to 10’s of thousands. Now, by adding YouTube support, TiVo is once again exponentially increasing my access to content. Filtering through the noise will be a challenge, but this partnership will help personalize your television to an even greater level.

To celebrate TiVo’s support of YouTube, I’ve put together a list of 20 of my favorite web video creators. You won’t find many cat videos, but you will get a glimpse of the future of the entertainment industry.

1.) You Suck At Photoshop - The series is dark and twisted, but is very very funny. You get the feeling that sometimes Donnie is pulling his “hypothetical” examples from real life experiences, but his obsession only adds to the comedy. Even if you don’t like photoshop, this is worth watching.

2.) PurePwnage - I discovered PurePwnage about two years ago and was instantly hooked. The show follows a pro-gamer around and films him embarrassing himself and others. While it’s shot in an amateur documentary style, it’s clear that Kyle has a ton of talent. The series is cleverly edited and offers a humorous glimpse at the video game sub-culture.

3.) Pretend We Don’t Exist - Most of the videos on YouTube are filmed for the web, they are quick and funny, but they also tend to be unpolished and gimmicky. The videos that PWDE creates are a breath of fresh air compared to the rest of YouTube. Their clips tend to be much longer and are focused on deep and dark subjects. The humor is much more subtle and is driven by the characters in their films. The filming and editing looks amazing and represents cinematography at it’s finest. There are more popular artists on YouTube, but more than any of the other videos, PWDE’s content deserves to be seen on a big screen television.

4.) ./ Shutdown - If you’ve ever wondered what really goes on in your IT department, ./ Shutdown is the series for you. They celebrate all things geeky and offer an entertaining and humorous look at anything nerd related. Their videos can go from quirky to awkward, to just plain mind boggling, all in a single episode. I don’t know how their videos would do with a mass market TV audience, but I’m not surprise that they’ve built a following online.

5.) Mondo Mini-Shows - Not everyone will appreciate the humor in Mondo Media’s videos, but if you like the itchy and scratchy episodes from the Simpsons, you’ll love these animations. By combining the right amount of cuteness with hair raising violence, they’ve stumbled onto a winning formula for the web.

6. ) Sub Pop - Sub Pop is the only channel on my list that I would consider to be professional content. Most record labels have been slow to evolve to the new media landscape, but Sub Pop hasn’t been afraid to adapt. During the 90’s, they discovered many of the top grunge bands and continue to introduce amazing new artists today. Their videos are better than anything you’ll find on MTV, even if the bands aren’t as popular (yet.)

7.) Kevin Nalts - Love him or hate him, there is no denying that Nalts really is a viral video genius. Between his job and his family, I don’t know how he finds time to create his videos, but his gems are some of the funniest clips on the web. The man knows no shame and isn’t afraid to exploit helpless kittens to get the fame that he deserves.

8.) Gradual Report - When Ze Frank gave up internet video it left a big void on the web, luckily other talented comedians have step forward to help keep you entertained. Daniel Grozdich’s style reminds me a lot of Ze, but his comedy tends to be edgier and more dangerous. His rantings borderline on craziness and brilliance, but it’s a tension that provides a ton of entertainment.

9.) Tom Green - Ten years ago, TV was sorted into neat and tidy channels, but today it’s a fragmented mess. When you tell Netflix what movies you want to see, does it really matter what studio made it? Likewise, who cares what network a show is on, if you are just going to TiVo it? Tom Green was one of the first celebrities to recognize this trend and instead of bitching and moaning about it, he started his own TV channel and now has a successful online talk show that he broadcasts on TomGreen.com His channel isn’t carried on any of the cable networks, but thanks to the magic of the internet, fans can still tune into his bizarre and zany antics.

10.) Charbax - Whenever there is a tech boondoggle in Las Vegas, the press will trip over themselves to cover it, but if the event is held in Europe, you’re lucky to find any coverage. Fortunately, Charbax covers many of these European tech events and provides a unique view into the consumer electronic industry. His questions are focused with laser precision and produce very stimulating discussions on current digital trends. His reporting goes way beyond the sound bites and consistently brings new and relevant information to his audience.

11.) Rabbit Bites - You may have never heard of them, but Buns and Chou are two of the most famous rabbits on the internet. By combining sharp humor with rabbit commentary, they’ve managed to win the hearts of their fans. Their show is a cross between Access Hollywood and Animal planet. They typically skewer pop culture from the rabbit perspective. As their popularity has grown, they’ve been able to use their fame to bring several big name guests on the show.

12.) Videoholic - Videoholic was a betamax blogger, even before blogging existed. Over the years he’s met with other Beta fans, traveled to CES and has even written for Betamax newsgroups. During that time he’s also managed to collect a treasure trove of tapes that literally cover walls and walls of his home. Whether it’s Ray Bradbury selling out to the prune industry or old “cell” phone ads that should not be forgotten, you never quite now what will be coming next. By sharing his life long passion with the larger community, Videoholic is helping to keep history alive.

13.) Noodle Scar - Bonnie hasn’t updated her site in six months, but I’m still hanging onto hope that Noodle Scar will come back. Once a day, she would create a quick 30 second clip filled with random awesomeness. The fast tempo format always left me wanting more. If you haven’t already seen her clips, her archives are definitely worth exploring.

14.) Jeremy Cathey - Jeremy is only 17 years old, but he’s already learned a lot about how to make great films. He doesn’t have access to a big budget, but his clips still look professional. One of the great things about YouTube is that it gives filmmakers like Jeremy, the opportunity to experiment and try new things, without the pressure of needing instant success. As he continues to perfect his art, I have no doubt that he’ll end up making films for even larger audiences.

15.) Improv Everywhere - Most of the practical joke shows on TV tend to make their victims look really stupid, but Improv Everywhere adds a bit of class to the practical joke genre. Through the power of the internet, they assemble random people together, in order to stage elaborate public demonstrations. The events are designed to be so ridiculous that people can’t help but be confused by what’s happening. Just watching the pranks unfold can be fun, but watching the reactions make it priceless. I’m hoping that they’ll come to San Francisco, so that I can take part in the fun.

16.) Vancouver Film School - Even before the internet, I was always a fan of college films. They tend to take risks that big budgets won’t and I like the roughness that they bring to their films. The Vancouver Film School consistently puts out some pretty impressive clips. Their videos do contain an occasional miss, but they’re not infected with the commercialism that is embedded in today’s professional content.

17.) Muggle Sam - Normally, I’m not the sentimental type, but you’d have to have a heart of stone to not be touched by Sophia and Isabella. They are two young girls who are growing up on YouTube. Every episode reminds me of how great it was to be a child. Each day you learn something new about the world. What really makes the series stand out is the quality of it’s editing. Muggles Sam has a special talent for taking small clips and using them to tell a bigger story.

18.) The Gigaom Show - Most of the interviews that I see on TV are usually by a reporter who really doesn’t know all that much about the person they’re talking to. The result is a quick 30 second clip of PR spin. When it comes to the Giga Om show, you can expect a much deeper level of analysis. Because Om Malick and Joyce Kim follow the tech industry so closely, they know the right questions to ask their guests. The show is currently on hiatus for the summer, but I’m looking forward to seeing more episodes in the future.

19.) Reel Geezers - Who needs professional movie critics when you can watch Marcia and Lorenzo share their take on the latest Blockbuster films? This Octogenarian Duo has been broadcasting their own movies reviews for a little less than a year and have already built a respectable following. I don’t always agree with their take on the movies, but, but I still enjoy hearing them.

20.) aniBOOM - aniBOOM helps cartoon and animation creators monetize their content. They use YouTube to showcase some of their best stuff. As a big fan of cartoons for grownups, this subscription is one of my favorites.

My tastes can be a little eclectic, but hopefully you’ll be able to find at least one or two new shows that are of interest. If you know of any good web series that I left out or if you happen to make your own web videos, feel free to leave a link in the comments.

Posted in Disclosure - I own stock in co. mentioned, Media, Netflix, TV, TiVo, VOD | 4 Comments »

Just Because You’re Paranoid Doesn’t Mean They’re Not After You

July 24th, 2008 Davis

Posted in Media, TV, VOD | 3 Comments »

Hot Donkey! DivX To Support The Matroska Video Format

June 26th, 2008 Davis

Good news web video fans. Hot off the presses Doom9’s forums, we learn that the upcoming release of DivX 7 is going to support the Matroska video format! Now I know that many of you are probably asking yourself Matroskwho?, but believe me when I tell you that this is a big deal for both DivX and Matroska fans.

A DivX / Matroska hook up will not only give web video creators even more options over how they want to present their content, but it will also ensure that consumers are able to take advantage of these advanced features with their favorite consumer electronic products. In the past, Matroska fans have had to go through a painful and complicated process in order to get their MKV files to play nice with their DivX hardware devices, but with the 7.0 release, it should be as easy as hitting play on DivX 7.0 gadgets.

So What Exactly Is Matroska?

Matroska is an open standards project that is aiming to replace existing media formats like AVI, ASF, MOV, RM, MP4, and MPG. The project had their official launch in February of 2006 and while it may not be the most well known video container, they’ve still been able to rack up over 3 million downloads since that time. While you can find many different genres utilizing the Matroska format, it’s seen it’s strongest support from the Anime community, which tends to be one of the earliest adopters for web video advancements.

In the past, Matroska’s popularity has been limited because there are very few devices that allow you to watch the MKV files outside of your computer, but the 7.0 rollout should give the format a huge boost. According to the Doom9 post announcing Matroska support, it doesn’t sound like older DivX DVD players will be able to support the .MKV format, but I bet it won’t take long before the PS3 updates their firmware to offer support. This would give Sony a big advantage over Microsoft, among the millions of fans who are passionate about the file format.

At first glance, it’s easy to mistake Matroska as a competing video format to DivX, but in reality it’s a different animal entirely. DivX is a file compression format that helps to reduce the size of your video files with minimal impact on quality, whereas Matroska is a container that can hold many different video compression schemes. To use an analogy from the DVD world, DivX would be the actual videos that you see when you watch your DVDs whereas, Matroska would be like a blank DVD. In and of itself, a blank disc doesn’t contain any data, but by inserting DivX or H.264 into the Matroska container, it allows you to enjoy a more interactive video experience.

In his post announcing Matroska support, DivX team member DigitAl56K discussed the balance that DivX has tried to maintain between supporting high end features and also keeping it inexpensive for CE partners to be able to decode the video files.

“It’s important to remember that what brought compatibility across many devices for DivX 5 and 6 was balancing certain bitstream properties so that we allowed for efficient coding with a standard that many devices could work to adhere to. Nothing prevents manufacturers from going above and beyond if they choose to - it happens today. What is important is that there is some known baseline that is consistently implemented and thoroughly tested so that you know if you adhere to it during content creation your file is going to play reliably on any certified device.

If you think back seven or eight years DivX was really the first company to try to find a standard that was designed around bridging the gap between high quality video on the Internet and the general consumer in the CE space. To do this we had to constrain certain properties of the encoder and there was a lot of pushback from many people who wanted an unconstrained MPEG-4 ASP format. I think that now there is a clear precedent that shows what can be achieved if we can find a good compromise.”

What About .AVI?

In the past, DivX has supported the .AVI container for their files, but .AVI does have some limitations. Most notably, it doesn’t support high def content encoded in the H.264 format. Perhaps even more importantly, .AVI doesn’t allow you to insert non-video data into the container.

Matroska on the other hand, not only supports H.264, but it also allows you to include data files with your videos. This means that you can create a video file that includes options like DVD menus, closed captioning data and subtitles for global audiences. It also allows you to include multiple video files into a single download. This would allow a content creator to take one of their popular videos and bundle less well known content along with it. Whether it’s including things like Director commentary and bonus scenes with a download or having the ability to attach an upcoming pilot episode to a more popular season finale download, there are many different ways that content creators can leverage this technology in order to create a more compelling video experience for their fans.

What Are The Drawbacks to Matroska?

Before you start ditching .AVI for .MKV there are a few things that you should consider. So far, we don’t really know when DivX 7.0 will be released, so it may be awhile before you can actually play your Matroska files on your TV. FWIW, I did notice that DivX recently started hosting Stage7.DivX.com on their servers, but the web extension currently redirects back to their main site.

Another limitation of the Matroska file is that you need to have a decent computer, in order to be able to playback your files. If your computer is more three years old, you are probably better off sticking with the .AVI format to ensure a smooth experience.

Whether or not you use the Matroska format, DivX’s decision to support the container will have big implications on the future of video downloads. By working with CE manufacturers to ensure that their processors are powerful enough to decode the format, DivX is paving the way to bring new interactive services to the video download market.

Posted in DivX, Media, Microsoft, TV, Technology, VOD | 2 Comments »

CBS Facing Tribal Council On The Next Survivor: Goodwill Island

May 23rd, 2008 Davis

Jonathan Weill with Bloomberg news noticed that CBS’ market cap is currently lower than their book value. When a stock is trading under it’s book value, vulture value investors tend to start getting interested, but in CBS’ case this may have all the makings of a value trap.

The problem, most of the assets on CBS’ balance sheet are attributed to goodwill.

If the market is right, they are expecting CBS to write down about $6 billion in assets. This would mean that the disconnect between the balance sheet and the stock price may not last for very long. Worse yet, if they did have to do a write down, it would also mean that their financial performance hasn’t been strong enough to justify their own internal valuations. Lower earnings + massive multi-billion losses tends to = unhappy investors, hence the dismal stock performance.

“So, on paper, this single, pneumatic intangible supposedly is more valuable than the company as a whole. As they used to say on CBS’s old show “The Twilight Zone,” you are now traveling through another dimension. If CBS’s audits were an episode of “Survivor,” a bunch of that goodwill would have been voted off the island by now.

Goodwill is nothing more than a ledger entry, representing the premium that one company pays to buy another. Specifically, it’s the difference between the purchase price and the fair value of the acquired company’s net assets. The more you pay, the more goodwill you get. It can’t be sold by itself, either. Hence, the term’s synonym: air. CBS acquired the bulk of its goodwill through its 2000 purchase of — strangely enough — CBS.”

With CBS planning to purchase CNET, Weill notes that they’ll be adding even more goodwill to the balance sheet. While his article raises some tough questions for CBS, Weill does offer some help to CBS management by giving them a top 10 list of excuses that that they can use, for why they haven’t taken their medicine.

Top Ten CBS Excuses for Avoiding Big Writedowns:

1. Dave’s got a turnaround plan!

Weill’s article was written tongue in cheek, but he does raise some pretty serious questions for CBS investors. There are times when large goodwill is justified, but there are also a lot of companies who use this line item as a way to make their financial condition appear more healthy than it really is. Goodwill is a tricky asset to put a number on because it’s so intangible, but there does need to be a legitimate justification for keeping that value on the balance sheet. If the market is valuing the entire company at less than goodwill alone, then CBS needs to rethink how much that goodwill is really worth or provide an explanation for how they are valuing the asset.

Posted in Media, SA | No Comments »