Streaming Media White Paper 2008 - (Page 26) 26 Best Practices: HOW TO PROFIT FROM INTERNET TV Surf’s Up! A New Wave in Content Distribution DAVE STONER, PRESIDENT AND CHIEF OPERATING OFFICER, VIEWCAST marketplace has hit the next wave,and it’s called internet TV. The underlying technologies continue to evolve—streaming protocols,encoders,servers, and players—but customers are no longer technologists interested in all the technical details. They are now business customers who recognize the functionality and cost advantages that broadband and mobile networks bring to content delivery. Fortunately, the tools are now available that offer the quality and reliability needed to support emerging business models. ViewCast has been a pioneer and remains an innovator in this marketplace. The streaming media A History Lesson Over the past few years, this market has transitioned from the pioneering phase to a mainstream business opportunity characterized by clear ROI justifications, broad customer engagements,and serious investment by major players in the content development and delivery industries. With this transition, a new name has emerged describing our market in a more functional way: internet TV. Internet TV is an easily understood term describing the delivery of TV content over the public internet. It is distinct from IPTV, which we define as the delivery of television content over a privately managed end-to-end network such as those deployed by Verizon (FIOS) and AT&T (uVerse). Internet TV takes advantage of the broad availability and cost-effectiveness of general purpose broadband internet connections to enable new business opportunities that were not viable over cable TV, satellite, or over-the-air video delivery models. were formed to create content with broad appeal for delivery over the local affiliate stations. Those affiliates needed to connect to the network feeds, build studio facilities for locally originated content (news, weather, sports, and local entertainment), build transmission facilities, license spectrum for transmission, and advertise their channel. A limited number of local channels were available—originally 12 (okay, 13 for you purists) for VHF and later, 56 more for UHF , . Cable and satellite television changed the distribution model substantially.They included the delivery of local affiliate channels over a new delivery infrastructure but also enabled nationally originated channels to be delivered without the cost and difficulty of deploying local stations. Some of these (ESPN®, CNN®, etc.) were typically available in program bundles from the cable provider, and others (HBO®, Showtime®, etc.) were available a la carte for an additional fee. Deploying such a channel could be substantially less expensive than building out a network of local affiliates but still required the negotiation of licensing deals with multiple cable and satellite providers, which held the keys to reaching a broadly distributed audience. Cable and satellite providers still have limited numbers of channels available (typically in the hundreds). available over terrestrial, cable, and satellite delivery. Delivery of content via internet TV over the public internet creates a more direct connection between content owner and viewer (consumer). Content consumption can be made richer, more interactive, more targeted, and more measurable. And perhaps most significantly, advertising can be more targeted and measurable. Advertisers are the financial engine driving television and radio delivery today. In the U.S. alone, television advertising amounts to about $70 billion per year. These advertisers are concerned about the impact of the DVR (digital video recorders) on viewing habits, especially the ability to skip commercials with a button press on the remote. They also recognize the opportunity that internet TV delivery represents, especially the ability to target their advertising locally,demographically, or even individually.The advertising models we are accustomed to on broadcast television are limited by traditional distribution technologies, but internet TV is opening up new models for advertising that can be less invasive and irritating, and more appealing and effective. The Challenges Unlike broadcast distribution channels, internet TV distribution does not provide a single standard for delivery. Some customers use Macs®,some use Windows® PCs,and others use a variety of handheld and mobile devices. Some prefer Windows Media®, some prefer Flash®, and others prefer MPEG-4. Even within communities of users,network bandwidths and screen sizes may vary. For content owners seeking to reach such internet audiences, solutions can become complex, especially when optimizing the video and audio quality for each user profile. Television viewing has established a high standard for video quality, and every viewer is expert enough to recognize compromises in the quality delivered. The Benefits of the Internet With the advent of internet TV, the costs for a content owner to reach a broadly distributed audience have been reduced by several orders of magnitude. If you have content with strong appeal to a select, broadly distributed audience, internet TV is an ideal delivery solution. And unlike terrestrial, cable, and satellite systems, the number of possible channels is unlimited. There are also key advantages to internet TV delivery that apply both to niche content owners and to those who have their channels A Whole New World In the early days of television, costs for putting a local channel on the air were extremely high.Nationwide television networks
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