Oh Snap! Cisco Wants to Buy Skype Now Too? For Realz??

On the heels of Cisco's acquisition of Extend Media, rumor has it that the data-networking giant has made an offer to acquire Skype before the Internet telephony company makes an IPO, which they just announced on August 9. Mike Arrington reported the news this morning from reliable sources, and said that while TechCrunch has not been able to confirm this rumor, it's not surprising because companies, "in lock down during the IPO process, is usually even more tight lipped than normal." Arrington cited Skype insiders who valued the company at $5 billion or so.

Skype itself made a big announcement of its own today with the official launch of Skype Connect 1.0., the enterprise version of its VoIP (Voice over Internet Protocol) telephony service that had been in beta since March 2009. Skype Connect, connects Skype to IP-enabled private branch exchange (PBX) or Unified Communications (UC) systems, which are standard telecommunication infrastructures for voice calling across organizations. Skype Connect already has 2,400 active global users and is certified to work with PBX and UC products from many companies, including Cisco.

Skype has been growing steadily with 560 million users and 8.1 million of those users pay an average of $96 a year for premium services. Skype generated $13 million in profit on net revenues of $406 million in the first half of 2010.

If the TechCrunch rumor is true, adding Skype to its portfolio would give Cisco access to Skype's worldwide enterprise and consumer network, a popular brand with potential celebrity spokespeople (like Oprah), and would integrate with its unified communications suite of tools for web conferencing (WebEx), videoconferencing (Tandberg) and Telepresence for business customers. Cisco estimates that by 2014, video will comprise of 57% of Internet traffic company and sees the potential for a $30 billion video communications market.

The VAR Guy was thinking the same thing as I was in his post, Cisco Systems: Buying Skype for Low-End Video Conferencing? | The VAR Guy:

"So, why might Cisco be taking a look at Skype? The answer is simple: Web-based video conferencing.

• At the very high end of the market, Cisco continues to promote telepresence executive conference rooms that can cost $200,000 or more per location to deploy. Gradually, Cisco has extended its telepresence strategy to the mid-market and to lower-end systems.
• At the very low end of the market, Cisco acquired the Flip video camera. The goal: Make video incredibly easy to produce, so that consumers and businesses load up the web with even more video — driving even more demand for Cisco’s broadband networking solutions."

Garrett Smith of VoIP Insider, saw a lot of synergy between the two companies on a variety of levels, in his post, Skype Would Make Great Acquisition for Cisco, including target growth markets (small business in particular), technology dependent customers (noting a possible mashup of technologies, "Imagine a wireless Flip that allowed for mobile Skype video calling."), proprietary technology and consumer brand.

Another possible consumer play could be for video chat in the living room. Earlier this year at CES 2010, Skype announced a partnership with HDTV makers Panasonic and LG to bring its popular video chat software to the living room featuring an embedded version of Skype 4.2. Also at CES, Cisco demonstrated a home TelePresence system that it said would be rolling out trials this year, with Verizon in the U.S. and with France Telecom.

Bernie Arnason of  Telecompetitor cited out other possible integrations of Skype with Cisco's IPTV and set-top boxes, Linksys routing equipment and numerous broadband products that could be Skype "certified".

Back in April 2008, I wrote about the rumor that Google might Buy Skype?, when eBay was getting ready to sell, but that ultimately did not happen. There was a great deal of speculation then like there has been today. But what about Google? There was some talk of Google making an offer, but backed away due to anti-trust concerns. Google actually added a new VoIP phone calling feature from Gmail last week, which already had video chat capability. According to Google, over one millions calls were placed within 24 hours of the launch. The service is free in the U.S. through 2010 and is 2 cents/min on international calls, and I have to say it's worked flawlessly every time I've used it. Clearly, Google has stepped into the ring to duke it out with Skype in the voice and video chat market.

Richi Jennings of Computerworld, collected a sampling of analysis from the IT and tech blogs that you can read here: Cisco to buy Skype, pre-IPO? (and lock out) and see the links below.

Related:

• Report: Is Cisco chatting up Skype?
• Rumor Mill: Cisco buying Skype? - FierceVoIP
• What Would Cisco Do With Skype? - Deal Journal - WSJ 
• Cisco: Bidding For Skype? - Tech Trader Daily - Barrons.com
• Cisco Reportedly Considering Skype Acquisition -- InformationWeek
• Cisco Eyes Skype Acquisition: Reports - VOIP and Telephony from eWeek
• Cisco's Skype Plan May Chill Telcos
• Will Cisco Swoop in to Buy Skype Pre-IPO?
• Cisco Eyes Skype Acquisition: Reports - VOIP and Telephony from eWeek
• Skype - Business blog - Skype Connect 1.0 is Officially Launched

¡Viva La H.264! MPEG LA Liberates H.264/AVC For All Free Video Content Forever... But What Does It All Mean??

The video codec format war heated up last week, with the announcement by the MPEG LA, that it has freed up the license of the H.264 AVC (Advanced Video Coding) codec, and will not charge royalties for any content that is free to consumers. The MPEG LA is the firm that manages the patent pool for AVC, and earlier this year, it announced it would not charge royalties for such video through December 31, 2015 (PDF link). But now and forever, it has made it free for the life of the license and will only charge for AVC encoded video content sold to end users in any form for a fee, on a title or subscription basis.

H.264/AVC video format is the digital video coding  industry standard H.264/MPEG-4 Part 10, or AVC  used widely in set-top boxes, media player and other personal computer software, mobile devices, Blu-ray Disc™ players and recorders, game machines, personal media player devices and still and video cameras. Apple has become most outspoken proponent of AVC, and backs it as the standard video codec used for its HTML-5 video compatible mobile iDevices like the iPhone, iPad and iPod Touch, as well as for iTunes videos, and Microsoft also announced support for H.264-encoded HTML5 video in IE9 earlier this year.

Many have speculated that the move by the MPEG LA was spurred on by Google's release of VP8 as an open source royalty free video codec, a new rival to H.264/AVC and potential replacement to the open source Theora. Google announced the release of the VP8 video codec under the WebM Project at the i/O developers conference in May, with broad industry support. Absent from the list of supporters was, of course, Apple.

The tug of war between these two competing video codecs has reached an inflection point according to Streamingmedia.com's Tim Siglin, who says:

"There is little doubt that the most recent announcement by MPEG LA is, in part, a counteraction against the potential inroads that WebM may make in the online video space."

The codec issue is a big dilemma for online video publishers says Jan Ozer. He recently authored a recent survey for StreamingMedia.com, Supporting the iPad and HTML5, and found that less Than 50% of publishers ready to implement HTML5 video,

According to Ozer:

"54% of respondents who were considering HTML5 support rated the lack of single codec either a serious concern, or a very serious concern. Lack of HTML5 browser penetration was rated even more of a concern, but that will resolve in time. The codec issue appears to be a permanent problem which will force producers to encode in as many as four or five different formats in the short term, and at least two in the long term."

Rounding out the analysis from Streaming Media is Dan Rayburn who acknowledged that while the MPEG LA's royalty free license is good news for content owners, it does not address the future market needs for subscription based content services and device manufactures who will continue to pay to license the codec.

Rayburn also agreed that the lack of a codec standard is a major sticking point for the industry:

"The news also does nothing to address what I consider to be a bigger issues which is the need for browsers to give us a single codec we can call use. Companies like Mozilla and Opera are still going to have to pay for a license if they want to support H.264 which means we are not any closer to have much in the way of video standard on the Internet."

As far as browsers go, they are waging their own war. Safari supports H.264, Firefox, Opera and Chrome support WebM, and IE9 will support both as well as its own VC-1. Mozilla has refused to support H.264 as a codec for the HTML5 video tag in Firefox, and it's unlikely it will in the future. Theora plays natively in FireFox 3.5, Chrome as of version 3.0.182.2 and Opera as version 10.50.  All browsers can play H.264 encoded video presented in Adobe's Flash plug-in, but as everyone knows, Flash doesn't play within Apple's iOS on its iDevices. According to current global browser market share and trends of the five major browsers, IE 6.0-8.0 leads with 52.68%, followed by FireFox 3.0+-3.5+ with 31.49% and those numbers are growing steadily as people migrate to the newer versions. Chrome has grown to 9.80%, Safari has about 5.09% and Opera is 1.90%.



Ultimately, it's all not just about patents and licenses, there's a much bigger back story. I like this post by Brightcove CEO Jeremy Allaire, The Future of Web Content – HTML5, Flash & Mobile Apps, which provides a detailed industry analysis on the codec format and browser wars. He says video is a cornerstone issue and the emergence of the mobile device industry has brought the issue to the forefront:

"With massive growth in hand-held web browsing from smartphones, iTouch devices and the pending iPad product, this has raised a deeper issue for media publishers who are eager to have their content be accessible to end-users. In particular, it is the show-down between Apple, Google and Adobe over who can control video formats on these devices that is creating challenges. Again, this is not about “what is the right technical solution”, it is about the political economy of who controls the formats that in turn lead to owning downstream audience and monetization opportunities."

While many big video websites, like YouTube and Vimeo, have rolled out their own HTML5 video players, we are held at bay by the big browser developers that can't agree which video codec to support in HTML5. The MPEG LA's move has brought us closer to a standard - with the two dominant video codec standards AVC and WebM - the tug of war continues and we're caught in the struggle. Until there is broad support for all codecs and containers across the industry, we won't be reaching a web video standard anytime soon.

About MPEG LA, LLC

MPEG LA is the world leader in alternative technology licenses, enabling users to acquire worldwide patent rights necessary for a technology standard or platform from multiple patent owners in a single transaction as an alternative to negotiating individual licenses. MPEG LA’s initial licensing program for MPEG-2 digital video compression helped produce the most widely employed standard in consumer electronics history, and the MPEG LA® Licensing Model has become the template for addressing other technologies. Today MPEG LA manages licensing programs consisting of essential patents in 57 countries. MPEG LA is an independent licensing administrator; it is not related to any standards agency and is not an affiliate of any patent holder. For more information, please refer to http://www.mpegla.com.

Related:

• To Infinity and Beyond: MPEG LA Extends H.264 Internet Video Moratorium Indefinitely - StreamingMedia.com
• MPEG-LA Announces No royalties on Free Internet Videos - Ever
• iPad and HTML5 Adoption - Supporting the iPad and HTML5
• Larry Kless' Weblog: Google Releases VP8 as Open Source Royalty Free Video Codec, Launches WebMproject.org with Broad Support from Online Video Industry
• Analysis: Royalty-free H.264 may clear way for HTML5 video standard | Browsers | iOS Central | Macworld

Related WebM reading:

• What Does the Webmproject Mean for the Future of Video on the Web
• VP8, WebM, and HTML5 video « Zencoder Blog
• Diary Of An x264 Developer » The first in-depth technical analysis of VP8

Cisco Extends Its Reach, Acquires ExtendMedia for Global Video Domination and TV Everywhere

Yesterday, Cisco Systems Inc. announced further expansion of its global video M&A strategy with its intent to acquire ExtendMedia Inc., to power its multi-screen delivery and "TV Everywhere" services. While financial terms of the transaction are undisclosed, Streaming Media EVP, Dan Rayburn estimates the the deal at $80 million which is expected to be complete in the first half of Cisco's fiscal year 2011. The Extend Media purchase will up Cisco's ability to grab a larger stake in the set-top business and IP-based video services.

Founded in 1991, the privately-held Boston, Massachusetts-based company specialized in video content management and monetization. It's closet competitor is thePlatform, which is owned by Comcast. ExtendMedia's main product is OpenCASE, a carrier-grade "TV Everywhere" platform for managing, publishing and monetizing video across PCs, televisions and mobile devices as well as game platforms, set-top boxes, and WiFi-enabled HDTVs. The majority of its employee base in Toronto, Canada, and will be integrated into Cisco's Service Provider Video Technology Group.

Cisco's Enrique Rodriguez, senior vice president and general manager, Cisco's Service Provider Video Technology Group explained the benefits of this deal:

 "ExtendMedia will strengthen Cisco's position in the delivery of IP video services by enabling service providers to provide a more interactive and personal experience and to optimize quality for consumer viewing devices."

Extend Media outlined the reasons for Cisco's acquistion in this FAQ:

Q. Why is Cisco acquiring ExtendMedia?

A: Cisco chose ExtendMedia because it has demonstrated success with key Tier-1 Service Providers. ExtendMedia brings a strong software team that understands the complexities of delivering multi-screen video over IP networks. Cisco has developed a successful working relationship with ExtendMedia over the past 2 years, and expects seamless integration with existing engineering teams. With expertise in both IP networks and video infrastructure, Cisco can enable Service Providers to offer a more interactive and personal experience and optimize delivery and quality for the viewing device.

Jeff Baungartner of Light Reading Cable provided some context to the deal within the overall market of multi-screen delivery:

"The deal arrives as operators such as Comcast Corp., Verizon Communications Inc., and Dish Network Corp. ramp up their TV Everywhere services, and cable operators begin to pursue IP video strategies. (Dish: TV Everywhere Site Is Portal to Growth.)

The acquisition would put Cisco in more direct competition with a range of publishers that have TVE aspirations, including Brightcove Inc., Limelight Networks Inc., which recently expanded into the game with its purchase of Delve Networks; and Comcast-owned thePlatform Inc. (Limelight Takes Aim at thePlatform, Brightcove.)"

While Cisco's press release didn't mention TV Everywhere, there is big money to be had in it over the next few years. Extend Media has been discussing how the television industry is being remade with the rise of the "The Virtual MSO" (”MSO” or “Multiple System Operator” is the industry term for a cable operator, like Comcast), as Janko Roettgers pointed out in his post Cisco’s ExtendMedia Purchase: TV Everywhere And Beyond:

"TV Everywhere was the industry’s favorite buzz word last year, and a number of operators as well as cable networks from Comcast to HBO have rolled out dedicated offerings since, but consumers have yet to jump onto these services en masse. However, it looks like ExtendMedia’s vision of TV Everywhere goes far beyond what’s being offered today."

Over the last several years, Cisco has been building its video empire with a focus on video collaboration, content creation and management, with the purchase of the Pure Digital, makers of popular Flip Video Camera, and videoconferencing vendor Tandberg, who it competed with in the TelePresence market.

According to Cisco, the Pure Digital acquisition exemplified its "build, buy and partner" strategy to move quickly into new markets and capture key market transitions. Working in many cases as a virtual company Cisco brokers services and white labels platforms that it hasn't yet acquired. At the time of the Tandberg deal which was a $3 billion purchase, New York Times' Ashlee Vance highlighted Cisco's recent M&A activity highlighted Cisco's recent M&A activity:

"In recent years, Cisco, based in San Jose, Calif., has been one of the technology industry’s most aggressive companies when it comes to acquisitions. It has bought close to 40 companies in the last five years, including the $6.9 billion purchase of the set-top box maker Scientific Atlanta and the $2.9 billion purchase of the Web meeting software maker WebEx. This year, Cisco bought Pure Digital, which makes the popular Flip video camera for consumers, for $590 million."

Several years earlier, Cisco also acquired web conferencing platform WebEx, a desktop collaboration standard for many companies and core to Cisco's unified communications experience. There's also speculation that Cisco will expand into the booming virtual event platform its own product for managing large scale virtual events. Over this past year, Cisco acquisitions have included smart grid company Grid Net, design consultancy Moto Development Group, and digital signal processing company Core Optics. See: List of acquisitions by Cisco Systems - Wikipedia for more information.

In this video Charles Carmel, VP Corporate Development, discusses major Cisco acquisitions and investments in FY2010 in relation to its "build, buy and partner" strategy:

Unlike Comcast that now own a stake of NBC, Cisco has yet to buy a content company and stayed primarily within the media and host network layers. But as the video industry and digital media space furthers consolidates, who's to say they won't?

About Cisco Systems

Cisco, (NASDAQ: CSCO), the worldwide leader in networking that transforms how people connect, communicate and collaborate, this year celebrates 25 years of technology innovation, operational excellence and corporate social responsibility. Information about Cisco can be found at http://www.cisco.com. For ongoing news, go to http://newsroom.cisco.com.


About ExtendMedia:
ExtendMedia is the leading independent provider of enterprise-class, multi-screen video software and solutions that help content owners and distributors build and deploy video services. Extend's flagship product, OpenCASE, manages video content across the lifecycle from ingest to monetization and across IPTV, web and mobile services in both ad-supported and pay media business models. Headquartered in Boston, Mass., ExtendMedia powers initiatives for innovative communications, media and consumer electronics companies including AT&T, Bell Canada, Hewlett-Packard, Mitsubishi/UB Cross, SanDisk and Thales. For more information, visit www.extend.com.


Related:

• Cisco Announces Intent to Acquire ExtendMedia -> Cisco News
• Cisco’s ExtendMedia Purchase: TV Everywhere And Beyond
• Updated: Cisco To Acquire Extend Media In Deal Worth $80M | The Business Of Online Video
• Light Reading Cable - Video - Cisco Buys Into TV Everywhere (Again) - Telecom News Analysis
• Updated: Cisco Buys Online Video Distributor ExtendMedia For $80 Million | paidContent
• The Television Industry Re-Made; the Rise of the “Virtual MSO”
• Cisco Buying ExtendMedia, Three Screen Content Platform + Networking
• ExtendMedia » And the walls came tumbling down…

Update 8/28/2010: Added YouTube - Charles Carmel discusses major Cisco acquisitions and investments in FY2010 and additional Cisco 2010 M&A information

Please Vote for this SXSW 2011 Panelpicker Session - Beyond the Box Office: Distributing Your Film Online

Malaika Mose, of Mose Publishing LLC, is organizing a panel session that is part of the SXSW 20011 PanelPicker program titled, Beyond the Box Office: Distributing your film online, and she's invited me to join her along with a lineup of respected voices in the online video and film community for this session. Please see the description and proposed panelist below and consider voting for his session. SXSW incorporates 30% of community involvement into the final programming decisions for the Interactive, Film, and Music conference activities for SXSWeek 2011, March 11-20, 2010. Voting ends one week today, 11:59 CDT on Friday, August 27, 2010.

Malaika Mose works as a software development manager and social media strategist for a Fortune 100 company. She's a film lover from way back and has dedicated a website, Beyond the Box Office, and is authoring a book to help filmmakers navigate this new world of online video distribution.

She describes the panel session in this way:

"In a time when getting a favorable traditional distribution deal is tough, filmmakers are taking matters into their own hands. In addition to selling their own DVDs they are looking at online distribution as part of their DIY distribution strategy. It's no wonder, with film festivals like this one and Tribeca making films available online at the same time they play the festival and comScore reporting that internet users watched over 30 Billion videos in April 2010. Shouldn't you be considering online film distribution too? In 60 minutes this panel will rundown the options for getting your film online, ways to make it discoverable once it's there, the best windows for online film distribution and mistakes to avoid when embarking on this journey. This panel's expertise includes: filmmaking, distribution deals, online video, TV Everywhere, connected devices, search engine optimization and mobile marketing. They will provide you with the information you need to use the power of the internet to get people watching your film on their mobile devices, iPads, computers and set-top boxes!" 

The panelists Malaika is hoping to snag include:

	Ryan Lawler - he's spent the last 5 years covering business, technology, and telecom-related subjects for a variety of publications based in New York. He’s the newest staff writer for GigaOm and NewTeeVee, but spent the previous two years following online video and digital media trends at Contentinople. Prior to that, Ryan covered telecom infrastructure for Light Reading.
	Miles Maker - A filmmaker and self-described ‘new media maven’, Miles Maker experiments with cutting edge technology to market and distribute his films on a variety of platforms including mobile. He's a producer of marketing and distribution for the film Spare Change and is the host of the talk show Convercinema. He can share his hands-on experience as a filmmaker in this new world of film distribution.
	Orly Ravid – She is the co-executive director of The Film Collaborative, a non-profit, full-service provider dedicated to the distribution of independent film. At TFC, Orly works primarily on distribution, sales/licensing and contract/negotiation services with a focus on new media digital distribution. She also handles theatrical releases. She is diligent in protecting filmmakers' rights and revenues is passionate for art film and socio/political issue-focused documentaries. Orly can talk about online film distribution in the context of a larger distribution strategy for your film.
	Larry Kless (Yours truly) - is a filmmaker and online video guru (or so they say). I blog about online video publishing, streaming media, web television, startups, gadgets, social media, advertising, marketing and videoconferencing. I've moderated panels at events like NewTeeVee Live or StreamingMedia on these topics and can speak to the technical requirements for distributing your film online. I'm also a long-time member of Canyon Cinema, one of the oldest independent and experimental film distributors owned and operated by film artists.

Some of the discussion topics are:

1. Why would anyone want to distribute their film online?

2. When is the best time to make my film available online?

3. What tools are available to help me?

4. How can I make it easy for my film's audience to find it?

5. What does Google TV and YouTube Leanback mean for me as an indie filmmaker?

If you want to hear some straight talk about online video distribution without all the PR spin, then please consider voting for his session.

The SXSW® Music and Media Conference celebrates its 25th Anniversary in 2011, and has become the biggest and most anticipated convergence of original music, independent films, and emerging technologies, and the premier destination for discovery.

Feedback is wanted fir all three SXSW events:
Explore the Proposals for SXSW Interactive »
Explore the Proposals for SXSW Film »
Explore the Proposals for SXSW Music »

Read Malaika Mose's post: All you ever wanted to know about online film distribution at SXSW 2011

Online Video Conversations: Erick Hachenburg, Metacafe - Part 2: The Growing Opportunity For Online Video Advertising

In part two of my conversation with Erick Hachenburg, CEO of Metacafe®, he talks specifically about the growing opportunity for online video advertising and how companies are using online video for advertising and branded entertainment. For Metcafe, the key to its business model is advertising and as a result, the company recently expanded it advertising sales team to meet the growing demand for its online video advertising offerings. Metcafe has premium content deals with Hulu, Warner and other Hollywood studios, and it has grown its movies-related advertising revenues over the past year by more than 70% year-over-year.

Hachenburg pointed out that in addition to being content partners, movie studios are also marketing partners. Metcafe works with movies studios very early on, sometimes 6 months before the movies release to build an audience, and on the opening weekend Metcafe can deeply integrate the brand into the site. Hachenburg noted that many of the consumer brands are interested in reaching consumers where they have their "passion points" through movies, television, video games, sports and music. This gives both advertisers and consumers more choices to both create and consume compelling branded advertising messages and entertainment.



Research findings from Metcafe's annual sponsored study on online video consumption conducted by Frank N. Magid Associates in May 2010, that found online video advertising is increasingly accepted by consumers. More than 55 percent of the 2,412 online video viewers surveyed found online video ads just as or more acceptable than TV ads, a 3% increase from 2009 and 18-34 year-olds are more likely than older viewers to find online video ads more acceptable than TV ads.

Hachenburg said:

"Clearly the way, that consumer brands have been marketing their products over the past years has been through video, through television primarily, the commercial break. What's happening with online video is, we're seeing for the first time a real movement of the brands from the television space to the online video space."

The first thing, he said, is to take the simple approach and take what you have that you know what works, which is the commercial break and bring that to the online video space.

"We are running pre-rolls and we are running different ways of trying to present that message. The impact, the sight, sounds and motion of commercials is just so powerful. It is almost the only way you can effectively brand advertise."

Beyond the pre- and post-rolls, Metacafe offers a suite of advertising programs to maximize viewer engagement with brands. From more robust programs where brands can take over the home page or site, mashup tools, branded entertainment channels and a variety of other options for product placement. One of the key advantages that Metcafe delivers to advertisers, Hachenburg said, is an audience that is passionate about the content and entertainment properties, and that offers greater value than a broad based site. Often times broad based sites have a much a greater audience, but according to Hachenburg, they are just passerbys just coming and going, and not spending that much time on the site.

Metcafe's audience is primarily the ‘entertainment drivers’ and social connected influencers that drive entertainment decisions for others. They don't snack on content, but dive deep into all the entertainment categories and are an especially valuable audience for advertisers. Metacafe believes that the real value lies not through scale but through depth and focus. While the company was once a YouTube competitor, it has been able to navigate the changing currents of online video industry and focus its business model on premium content, branded entertainment and the growing opportunity for online video advertising.

The online video portion of the Magid Media Futures TM 2010 study was sponsored by Metacafe. A complete summary of the online video portion is available for download at http://magid.com/metacafe.pdf. 

Online Video Conversations: Erick Hachenburg, Metacafe - Part 1: The Launch of Metacafe Movies and the Future of Online Video

This post is part one of a two part conversation I had with Erick Hachenburg, CEO of the online video entertainment site Metacafe®, to discuss the recent launch of Metacafe Movies, how his company has shifted its business model to focus on showcasing premium content from the entertainment industry and how it will change the face of online video entertainment. Metacafe Movies launched this past May, and as Hachenburg explained, it's a channel dedicated solely to showcase videos about and from the movie industry. It's more than just trailers, he said, and includes unique original programming, exclusive behind-the-scenes clips, interviews with the directors and actors, featurettes, restricted red band content and a first-of-its-kind 3D showcase to give viewers the inside scoop of their favorite entertainment genres.

The online video market continues to grow and Metacafe has seen a huge growth in its audience year-over-year. Movie trailers and clips are currently driving nearly 10 million video views per month on Metacafe, and the Metacafe Movies Facebook fan page launched with more than 23,000 fans. In June, Metcafe unveiled the findings of its annual sponsored study on online video consumption conducted by Frank N. Magid Associates, that found a dramatic increase in consumers turning to the Internet for entertainment, with the highest percentage among 18 to 34 year-olds. Metcafe sees this as a ripe opportunity to connect advertisers with the, "Entertainment Drivers," enthusiasts and influencers who drive entertainment decisions, define pop culture and determine breakout hits in the social media world.

Metacafe has assembled an editorial team of movie experts, led by Mark Poggi, formerly of Netflix, and Steven Horn, formerly of Rotten Tomatoes, who just today was named Vice President of Programming responsible for managing Metacafe’s five premium entertainment studios of, Movies, Video Games, TV, Sports and Music. Metacafe has taken the approach of investing in premium ‘quality’ content which Hachenburg says is disruptive for the online video industry. In the press release, Metacafe Launches First Online Video Destination Dedicated to Movies, Hachenburg pointed out that:

"Our singular focus is on building the premier movie and entertainment online video site, delivering a great experience for our viewers and valuable marketing results to our advertisers. The launch of Metacafe Movies is an important milestone in this endeavour and one that we will continue to build on in the coming months."

This short marketwire video was included as part of the press release and offers a quick snapshot of Metacafe Movies, with sound bites from Hachenburg, Horn, Poggi and Mike Vorhaus, President of Magid Advisors, a leading research firm.



While Hachenburg acknowledged the stiff competition from YouTube, but he's optimistic that Metacafe's singular focus on professional and premium content about the entertainment industry will continue to attract that coveted 18 to 34 year-old audience.

Hachenburg noted:

"What we're doing is evolving into a focus on a particular channel, just content form the entertainment industry, and we think that's what's going to change the way consumers think about how do get online video. So instead of being something for everybody, it's the best, the deepest, the richest offering for a particular type of content for audiences that are fans of the movie industry."

Hachenburg also said that YouTube has been very clear about where there focus is, and that's being an online video platform, where people can upload whatever content they want and can connect it with friends and fans through many sharing channels. Metacafe sees YouTube as an important platform for the industry and has helped online video become more pervasive. But it's very different from Metacafe's business model as a media entertainment site working with brands to target young entertainment enthusiasts.

As for where we are currently within the online video world and what the future holds, Hachenburg suggested that:

"We're very much in the early stages of the online video industry. If we're doing $1 billion of advertising this year and there's $70 billion in television advertising already being spent every year, you can see how much potential for growth. The same is true with views. For a typical site the whole month worth of views may be only one television show in primetime, but that growth rate is accelerating. We're seeing, two years ago, 50% growth rate in viewership, last year 100% growth of viewership. So that means the exponential curve is well on its way and we're still heading upward. When you're in an industry that has more viewership and is accelerating, more advertising dollars and is accelerating, and more access to content, you can imagine we're in the very early stages of an exciting opportunity."

About Metacafe® – Entertainment That Connects
Metacafe® is the first entertainment destination solely dedicated to showcasing the best videos from the world of Movies, Video Games, Sports, Music and TV. We are the trusted source that keeps millions of viewers plugged into their entertainment passions every day, and we connect marquee brand advertisers with their target consumers via close association with the most popular entertainment content on the web. Metacafe attracts more than 10 million unique monthly U.S. viewers (1). The privately held company is headquartered in San Francisco, with offices in New York City, Los Angeles, London and Tel Aviv. For more information – and millions of entertaining videos – visit www.metacafe.com
(1) comScore Video Metrix, March 2010

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Video Publishing Platforms and the Value They Bring to the Market

This video is from a panel session I moderated at Streaming Media East 2010 on, Media Framework: Video Publishing Platforms, and features a diverse panel from the online video world, including Bismarck C Lepe, President, Products, Ooyala; Krish Melon, CTO, Synaptic Digital; Ron Yekutiel, Chairman, CEO, Kaltura and Jason Liebman, CEO, Co-Founder, Howcast. The goal of the session was to describe what publishers need and how much they should expect to play for managing content, what are the process and main features of publishing platforms, and the viability of build vs. buy. In the presentation, each speaker shared customer use cases that demonstrated how businesses are using online video, along with capabilities and new features available from their platforms.

I conducted separate video interviews with Ron Yekutiel and Bismarck Lepe, which you can watch for a demonstration of the new product features available from both Kaltura and Ooyala. I also spoke with Jason Liebman, in this Qik video interview, who gave an overview of Howcast, where it is within that market and why every company should be a media company.


A103: Media Framework: Video Publishing Platforms
Moderator: Larry Kless, Founder, President, OnlineVideoPublishing.com
Bismarck C Lepe, President, Products, Ooyala
Krish Menon, CTO, Synaptic Digital
Ron Yekutiel, Chairman, CEO, Kaltura
Jason Liebman, CEO, Co-Founder, Howcast


Session description: A number of vendors offer video publishing platforms, the features and functionality-not to mention cost-vary widely. Some vendors focus their solutions on content management and monetization, while others are geared towards enabling syndication and interactive advertising campaigns. Adding to the confusion is the fact that different platform vendors have different metrics for billing, and costs rise as content owners become more successful. This session will lay the groundwork for content owners to better understand what type of publishing platform they need and what they should expect to pay for managing content.

While the description of this panel session focused primarily on the cost perspective of video publishing platforms, the panel session took a different course, and the speakers described more of the core components and value that platforms bring to the market and shared customer use cases. The following is a summary of the highlights of the panel discussion.

What is an online video platform? What are the components and what are people asking for?
Ron Yekutiel pointed out video is becoming an integrated portion to everything on the web, and companies any size need video tools for the variety of business, training, marketing and e-Commerce applications. The core components of a platform that are needed to publish video for online and mobile experiences include tools to upload, encoding, manage, syndicate, monetize and view analytics. Important aspects of online video platforms are the ease of integration and flexibility to scale and customize the feature sets for specific customer needs.

Krish Menon spoke to the importance of businesses having delivery methods that best fit the communication need. He said that for his clients it's key to "create once and deploy many" and the overall platform serves the purpose of getting your content out to the right audiences in the right way.

Bismarck Lepe also emphasized that video platforms make it easier for customers to build businesses with online video, and that it's not just about on-demand content but also live streaming. He noted that video platforms are on the forefront of the market and better understand the consumer's video viewing patterns, and are best suited to help businesses better innovate with video.

Jason Liebman shared a different perspective with Howcast, and how they have built their own platform to help third parties tap into their ecosystem to create high quality content and syndicate it in a lot of different environments. Howcast thinks more of the video end-to-end video life cycle, and uses data on what people are searching for and viewing to drive creative and business decisions.

How do I get started? What's it going to cost?
Bismarck Lepe said that first and foremost, you need to ingest your content into a system and transcode it, then add metdata, apply permissions, syndicate it, monetize it using ad networks and analyze the viewing data. Ron Yekutiel pointed out the Kaltura has both a SaaS offering that is a good fit for smaller companies and you pay a monthly service cost but they also have a completely free Community Edition that you can download and put behind your own firewall. Overall, there was consensus among the panel the costs are varied, and can range from a few hundred to several thousand a month. Yekutiel also noted that all the platforms have a full featured 30-day free trial.

How about cost savings for using a video platform?
Liebman noted that analytics are key and getting accurate viewing data has helped drive their business decisions. Lepe acknowledged that not having to build out your own encoding and analytics clusters are huge cost savings to businesses – but we're getting to the point where it's not just about cost savings, but adding value. It's about creating more revenue using analytics and monetization tools, as he said, this has to be about the creation of a value center and not just about a cost center.

To see more videos from Streaming Media East, go to: http://www.streamingmedia.com/ConferenceVideos

Delve Networks Steps into the Limelight, Seattle-based OVP is Acquired by CDN Limelight Networks

More news of consolidation within the online video market came earlier today, with the announcement that Arizona-based content delivery network Limelight Networks Inc. has acquired online video platform Delve Networks for an undisclosed sum. Details about the acquisition may be disclosed later this week on Aug. 5th, when Limelight reports its earnings to investors, but is estimated $10 million in common stock and cash which is roughly the amount Delve Networks had raised from investors.

Castro told The Seattle Times that he had been talking to a number of possible buyers before reaching the deal with Limelight. The Seattle-based company was growing rapidly from 20 customers in early 2009 to more than 120 today, and was at the point where it needed to build out a larger sales and marketing team or hook up with a company like Limelight, that has the sales force and reach. Like many others in the saturated online video platform market,  Delve Networks offers a cloud-based end-to-end solution to manage, deliver, publish and measure viewership.

Just a year ago, Delve Networks and Akamai announced a partnership to deliver cloud-based online video publishing solutions, which Delve said at the time, was aimed at challenging Brightcove as the leader in the online video platform space. The deal was not much different from existing relationships Akamai has with other OVPs, such as KickApps, VMIX, Multicast, Onstream Media, VBrick, KIT Digital and Ooyala. Now a year later, Delve has agreed to be acquired by Akamai rival Limelight, and will be offered as part of Limelight's application and will compete not only with Brightcove, but also with Ooyala and Comcast’s thePlatform.

This is Limelight's third acquisition to add value to its CDN offering, following the purchase of mobile ad insertion startup Kiptronic in May 2009 for a reported $12 million and interactive ad pioneer Eyewonder in December 2009 for $110 million. While the terms of the Delve deal were not disclosed, parties on both sides were celebrating the announcement. The entire Delve Networks team of 22 will be joining Limelight the new Video Platform Solutions Group and Alex Castro, who co-founded the privately held company in 2006 and was CEO, is now Vice President and General Manager, Video Platform Solutions of Limelight Networks.

On the Delve Networks blog, Castro wrote:

"Limelight’s team culture, vision, and philosophy are very similar to our own and we feel this is a great fit. They value customer relationships first, think at ‘Internet scale,’ and do a great job of making the very complex seem easy. Even though we are now part of Limelight, all of the things that matter to you will stay the same. 

We’ll still deliver a powerful, yet easy to use, online video platform with content management, analytics, monetization, player customization, and rich APIs. We’ll continue to provide the same level of support we’ve always delivered. And we’ll still work with CDN partners beyond Limelight Networks for content delivery in keeping with our belief that open ecosystems are important."

In an email to Light Reading Cable, Limelight spokesman Paul Alfieri said that they won't be forcing Delve customers to use Limelight as a CDN:

"We're going to continue to offer customers their choice of CDN. Limelight will become a CDN option, and over time as the CDN and Delve teams innovate, we hope to offer some compelling reasons for our customers to use both services together. However, customers will not be required to change anything about their service."

Delve’s video platform includes patented semantic video technology which extracts information from within the video to provide enhanced search, meta-data tagging, and indexing capabilities. Delve has signed up over 120 customers, such as, Cleveland Clinic, American Hospital Association, ESPN, CDW, Standard & Poor’s, Hallmark, Lego, World Vision, and several professional sports organizations.

In the company press release announcing the acquisition, Jeff Lunsford, chairman and CEO of Limelight Networks said:

"As online content consumption accelerates, content producers and online businesses need scalable tools to easily and quickly publish their video and syndicate it to an ever-expanding list of web properties and connected devices. With Delve Networks added to our global computing infrastructure, Limelight Networks now can provide our customers with an at-scale value-added solution for publishing online video, analyzing end-user preferences, and, in conjunction with our EyeWonder and mobility products, monetizing their digital assets."

According to Dan Rayburn, this is a smart deal for Limelight and 2010 is a make or break year for the company:

"While the acquisition won't add much in the way of top-line revenue to Limelight, it does give the company a crucial piece of software to help enterprise customers manage their video assets and also gives Limelight a video analytics component."

Rayburn added that:

"As a result of Limelight focusing on more non-CDN services, it's also interesting to note that I am hearing about companies who would not have though about potentially acquiring Limelight a year ago now keeping a closer eye on the company. While it has always been speculated that Limelight would some day be acquired by a telco, if they continue to move to being more of a SaaS provider, it probably wouldn't be a telco that ends up taking them out of the market."

This deal could be viewed within the online video ecosystem as an example of the CDN industry blurring the lines between the online video publishing and content delivery markets. Online video platforms have gained a greater share of customers across the spectrum of major corporations and SMBs by offering scalable plans at affordable rates, extensible modules and content delivery solutions. Over the last few years, with the rise of the OVP market, CDNs have been viewed as more of a commodity that just delivers the bits and bytes. But does this acquisition along with the acquisition of Episodic by Google earlier this year, and signs of more consolidation on the horizon –  is the OVP market on its way to becoming a commodity?

About Limelight Networks, Inc.
Limelight Networks, Inc. (LLNW4.24, -0.01, -0.24%) provides on-demand software, platform, and infrastructure services that help global businesses reach and engage audiences online or on any mobile or connected device, enabling them to enhance their brand presence, build stronger customer relationships, analyze viewer preferences, optimize their advertising, and monetize their digital assets. For more information, visit http://www.limelightnetworks.com or follow Limelight on Twitter at www.twitter.com/llnw

About Delve Networks
Founded in 2006, Seattle-based Delve Networks makes it possible for organizations of any size across any industry to realize the potential of online video. Delve’s advanced, easy-to- use and highly customizable online video platform offers all the tools necessary for publishing video online including video hosting, encoding, content delivery, content management, semantic search, metrics, advertising and syndication. By leveraging the power of cloud computing, Delve gives its customers the ability to quickly adapt as demand for content increases allowing for greater overall scalability, efficiency and reliability. Delve is backed by DFJ Frontier, Intel Capital and Labrador Ventures. For more information, visit www.delvenetworks.com.