Vuze CEO on TV Everywhere, competition (uh, or lack thereof)
He's seen the failure of many entrepreneurs trying to create online video distribution sites. Others have had to rewrite their business plans as providers of video content resist working with them. Here, GIgaOm writes about how a starvation of content hurt Joost, a video online firm started by Skype's founders.
Here's the problem as BianRosa sees it: The content providers remain locked in arrangements with cable and satellite cable service providers -- a trend that could become worse if Comcast takes over NBC Universal, BianRosa said. In addition, those upstarts are facing a steep uphill battle against cable giants Comcast and Time Warner, who are reportedly close to launching a project called TV Everywhere that would keep its online video content strapped to bundled broadband and cable television service plans.
As highlighted before, the cable and satellite television industry is among the most resistant to the Web when it comes to putting the hundreds of channels it runs through bundled program packages online. The music industry resisted the Web at first and then relented to a la carte pricing models like iTunes. Newspapers decided to put everything online for free but are now reeling from that decision as they try to figure out how to monetize content in a way that supports expensive operations.
"Video is at a fork in road and they have to choose which path to take," BianRosa said.
And so far, it looks like cable and satellite service providers and the broadcast and cable content companies that give them ESPN and Sex in the City and Project Runway episodes, are choosing to cling onto the past, BianRosa said.
That runs contrary to efforts in Washington to open communications networks so that innovative applications Vuze, Joost and Boxee can provide alternatives ways to give consumers video entertainment. Today, Comcast, Time Warner and Cox have ultimate say in what consumers are getting from their living room televisions. The Federal Communications Commission is forming rules that would open broadband Internet networks from the grip of carriers, for example. Vuze filed a complaint against Comcast's alleged blocking of file-sharing application BitTorrent, which resulted in a ruling against the cable giant. The ruling, under former FCC Chairman Kevin Martin, is considered a pivotal moment in a years-long push for open-Internet access rules.
BianRosa, a Comcast subscriber, wants to watch French television from his Bay Area home. What's irritates him is that he can't get content from his native France unless he subscribes to an international channel package that includes Turkish and Mandarin programming. That same approach is what cable and satellite firms want to maintain as the Web encroaches on the television. But the cable carriers' biggest allies so far are content providers who continue to sign contracts with cable companies because they can't get the same returns online as they get when they sign licensing deals with cable firms, who have massive consumer reach.
"The cable industry is ultimately trying to prevent their business from
being disrupted regardless of what consumers want," Bian Rosa said.
Vuze, launched in 2007 allows users of the web to directly swap video files. The company works with content companies for videos and distributors like gaming consoles and Tivo to get their services to customers.
Recently, BianRosa has seen more resistance from content companies to work with online entertainment video startups.
It's a short-sighted view, BianRosa said, because if you offer consumers more choice and innovation and ways to access content overall, you'll see better services and better content emerge.
TV Everywhere, a pilot project expected to launch soon by cable operators, poses even more risk for startups, Bian Rosa said. And the model to give content online for free or charge only to subscribers is a way for cable carriers to maintain control of their services and content inside closed networks.
"Today, for any startup trying to fundraise to do a content aggregation service, there is no way this will happen," Bian Rosa said. "And by virtue of having TV Everywhere, even as project and not a live service, it obliterates entirely for startups the ability to launch services to compete."
October 30, 2009; 8:00 AM ET
Categories: Online Video | Tags: bian delrosa, comcast, skype, video sharing, vuze
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