The Future of Content Consumption: Which Screen?
By Christine Dorffi on Mar 28, 2008
March 2008 - Liz Gannes from NewTeeVee moderated a Stanford/MIT Venture Lab panel discussion regarding two startups offering opposite approaches to long-form video content delivery: VUZE for delivering/viewing free (ad-supported) content on computers and VUDU for delivering/viewing fee-based content on TVs via a VUDU device.
Some of the terminology that got flung about follows:
- Long-form video (movies, sports events) versus short-form video (typical YouTube snippets)
- Tail comprises the specialized segments for vertical audiences (e.g., snowboarding events, documentaries on esoteric subjects)
- Leaning Forward vs Sitting Back - Younger people who are accustomed to viewing and interacting with content on their laptops "lean forward" to view 10 inches away; over 35 age range tends to "sit back" 10 feet away from TV and be broadcast to. Describes an attitude toward video, versus just the physical posture.
- Live - the definition of "Live" was debated by panelists/audience. In the end, there seemed agreement around a "Live Event" (e.g., a boxing match or a concert) being watched in a linear manner in real-time (no time-shifting via DVR), and "Live Broadcast" which would be watching the live event in a time-shifted manner (DVR). Agreement that even pausing for 5 seconds makes it no longer "live."
The panelists were Mark Jung, CEO, VUDU; Gilles BianRosa, CEO, VUZE; Ben Huang, Product Mgmt director, Microsoft TV; Gary Lauder, Managing Partner, Lauder Partners (venture capitalists); and Howard Hartenbaum, General Partner, Draper Richards (venture capitalists).
Jung started off with a demo of VUDU, a closed-end peer-to-peer network for distribution storage via the VUDU boxes, each of which "volunteers" to serve any other VUDU boxes in its vicinity. Jung wants to merge the internet with TV on your TV (not on your laptop). The "special sauce" VUDU adds is the painstaking but small-footprint encoding to bring movies to DVD or Blu-ray quality.
VUDU serves what he sees as the 2 kinds of viewers: those who know what they want to see and want to find it easily; those who was to be recommended to. VUDU lets you surf your TV the way you surf the internet. Jung believes such consumption will displace physical DVDs, pay-per-view, and broadcast TV consumption.
The UI makes aims to make the transaction process so easy that you (the consumer) don't realize how much you're spending -- for example, clicking a button to choose "Buy" rather than "Rent" in the middle of watching a video.
Jung also said they are looking at adding a publishing channel using their API where independent filmmakers can publish their videos and decide how much to charge for them. There was criticism that this was a filter, but Jung noted that State Attorney Generals will quickly sue publishers for "indecent" content so they have to check for that.
BianRosa then talked about VUZE's diametrically opposite approach, which is to serve content via laptops as "a global distribution and exchange channel for high-res digital content." He noted that as the numbers of subscribers/users grow, the numbers of views of tail content also increases, thus making it more defensible to serve up.
VUZE is open-platform, uses open-source APIs, and offers open pricing/business models to content providers. He says that in surveys, more than half of those surveyed preferred "free" ad-supported viewing (15-30 second ads) versus paying for content.
There was discussion around the cost of content delivery over the internet. Vuze has filed a complaint with the FCC against an ISP for its alleged restrictions on what its consumers are allowed to download.
Venture capitalist Hartenbaum observed that the trend is toward personalization. At his home (wife and kids), everyone watches different material on a different device because of divergent interests. He also noted that fewer and fewer people globally want to be served only American-generated content so what will have to change are the distribution rights/model.
Lauder (who owns a VUDU box) praised it as having a "really, really good user interface," which he believes is key -- a user's ability to quickly find the content she or he wants to view is critical.
Microsoft's Huang noted that Microsoft IS in people's living rooms already, via devices such as the XBox. He noted that people who have purchased a device are more willing to pay for content on that device -- $60 games, for example.
All in all, a thought-provoking session. It will be interesting to look back in another 12 months and see where both VUDU and VUZE are on the landscape.