Secures $10 Million in Venture Capital, a unique online video advertising platform that allows publishers and advertisers to match relevant advertising with online video content, has closed a Series A round of $10 million from new investor Redpoint Ventures and existing investor Gemini Israel Funds, to enhance and expand the company’s product offerings, broaden recruitment efforts, and grow operations. The company was founded in 2006, and is headquartered in San Mateo, CA. uses advanced technology to analyze the video, audio and metadata to serve contextually relevant ads without being too invasive, monitoring viewers interaction with ads and adapting to their behavior.

With video being one of the fastest growing areas, there is tremendous opportunity in video advertising. However,’s focus on “video advertising beyond the pre- and post-roll”, is a bit puzzling – pre and post roll is where advertising has traditionally been tried and succeeded (perhaps less successful now).

I’m not so sure that users will click on an ad during a show because it will interrupt watching the video and take the user to a new page. Content producers and content networks wouldn’t be too happy if the users don’t get to watch the entire show!

Tivo brings Internet movies to a TV near you

amazon_unbox_tivo_logo.gifTiVo announces its customers can now rent or buy movies right from the TiVo box or from and view them on a TV, without requiring a computer. when this service was first announced in February, it required users to select the video on a PC. The “Amazon Unbox on TiVo” service is for customers with Broadband Internet. Amazon has about 10,000 movies, shows or other video. A movie rental will cost about $4 and a television show about $2, and you have 30 days to watch it.

Now you don’t have to go to the video store (e.g. Blockbuster) or even order movies through the post (e.g. Netflix). This is another slap on the face for both companies, and both better offer a similar service or become extinct as broadband becomes more mainstream.

This is not a streaming service, but a download-and-view service, so its not exactly video-on-demand.

Currently, about 50% of U.S. homes have broadband.

Broadband is still not good enough for movie downloads, but it looks like TiVo wants to get a head start in bringing Internet movies to the TV. With good reason – broadband speeds are increasing and set-top boxes are becoming more open (see FCC mandate), which means the set-top box will become the entertainment centerpiece of home entertainment.

Is there a future for, the TV network founded by Al Gore, is the first 24-hour TV network to put user generated videos on TV Channels. These videos, which calls VC2 (Viewer-Created Content), are short programs of 3 to 7 minutes called “pods”. About 30% of are VC2 pods. Here’s how it works: users upload pods to Current’s website and everyone in the Current web community helps decide what should be on TV through a process called “greenlighting”. Users can also create Ad Messages called V-CAMs and promos for Current TV or for the general topic of VC2. Current gets exclusive rights over user submitted pods, but the user gets copyright ownership.

This week Current announced a deal to promote Current on the social network Bebo: users will be asked to upload a video to Bebo for the chance to visit Current’s London studios. Current will supply content for Bebo’s video section. Bebo users will then be able to add Current videos to their own profile pages.

Is sustainable? with YouTube on AppleTV and on mobiles (iPhone, LG Phones), and Internet TV providers like Joost and Babelgum likely be on TVs soon, Current is in a crowded arena. The biggest hurdle will be inspiring budding video producers to create quality videos. So far’s strategy has been promotions, V-CAMs that pay $1000 per piece on TV (can make $50,000 but that is a very long shot), and simply appealing to a once-in-a-lifetime opportunity to become half-famous via VC2.

Without a big name or Word of Mouth publicity, will be limping. The agreement with Bebo is a good example of creating demand for video. But this isn’t enough. At this rate, will soon fade into oblivion.

Ushering a New Era of Consumer Choice in Set-Top Boxes

Today, July 1, marks the day the US Federal Communications Commission (FCC) has mandated that set-top boxes are separated from the security mechanisms that determines which channels are descrambled. The security comes in the form of a CableCard that is inserted into the set-top box. Rather than cable TV providers renting you a set-top for US$4 to $5 a month, now you can buy a set-top from a retail store (when it becomes available) and simply activate a CableCard from the cable TV provider to (first card is free, additionals $1.91 each).

I applaud this move towards providing a new era of consumer choice. By separating the set-top box from the mechanics that determines which channels are descrambled, a customer is able to purchase a set-top box from anywhere (say BestBuy) and keep the same box even if the customer moves or switches television providers. This also gives set top box manufacturers more latitude in bringing alternate forms of video to the TV. Expect long-form Internet TV providers like Joost and Babelgum to be integrated into set-top boxes soon. Much like AppleTV has done, expect even short-form TV content such as YouTube to be on set-top boxes.

In the short term, the cost for consumers will go up because the simple set-top box will now have an added CableCARD module. However, this “integration ban”, as this is sometimes called, will:

  1. create a new retail channels to reach customers.
  2. create an opportunity for new manufacturers such as ADB and even Tivo to enter the set-top box market.

The latter will create enough competition in distribution (retail and TV service provider), manufacturing, and usage choices (purchase vs. renting), that value for consumers will go up (overall prices may increase as set-top boxes integrate Internet TV).

This is a great move for consumer and don’t let your cable provider make you think otherwise.

Related Articles:

  1. CableCards Arrive July 1, And No One’s Happy
  2. New rule for TV set-top boxes sets stage for higher cable bills

TV Advertising will grow, but who will eat the cake?

According to the USA Today, a recent report published by PWC is forecasting that traditional TV advertising sales will grow 4.5% a year to $46.3 billion in 2011. When you consider product placement revenue and fees that cable, satellite and phone services pay to carry a channel, network TV revenues could grow of 6.5% a year to $85.4 billion in 2011. Broadcast and cable networks have been reeling from dismal ratings because there are more channels to view (on average, a home gets 104), consumers are using DVRs to watch TV shows (DVRs are not counted in TV ratings, yet), and consumers are using the Internet (on a PC) more and more as a medium for Entertainment. For example, more and more viewers are using YouTube to watch amateur Internet videos from a PC.

Despite the ratings slippage for individual TV networks, TV viewing is actually up:

“We had a record year of TV viewing this past year,” says PricewaterhouseCoopers advisory partner Mike Kelley: “The online phenomenon has done a lot to bolster TV viewing because it allows people to interact with TV programs, to learn more about plot lines. We even have leaks about an upcoming episode of a program. While it can be viewed as a curse, it has also been a boon.”

So what’s going increase TV viewing? The Internet is becoming a bigger source of videos, but the following will increase TV viewership and even shift Internet Video viewing from the Computer to the TV screen.

  1. HDTV – With the high resolution and quality of HDTV, users will not just watch more TV, but also will shift to using the HDTV for watching Internet Video as well. PWC predicts that nearly 59% of homes will have HDTVs in 2011, up from 12.7% at the end of 2006. HDTV uptake will be propped up by falling prices and the FCC mandate to transmit all TV programs in high-def by 2009.
  2. DVR – DVR growth is expected to rise to 39% in 2011, up from 11.8% in 2006. With Slingbox and other DVRs, people have already started to record and watch TV, albeit with time-shifting or place-shifting (e.g. watch on mobile).
  3. Integration of Internet and TV and the Separation of the Set top Box – With Joost and Apple TV coming to a TV near you, the Internet Videos will be conveniently available on the TV.

As a result, consumers will be able to get TV/Video programming on a better screen, and be able to watch it at a convenient time.

The landscape for Broadcast and Network TV providers will change drastically, as players like Joost and Apple come in and swoop their viewership and advertising revenue. However, these same players will grow TV advertising revenue. Good news for content providers!

YouTube inspired Adult sites

It’s interesting how a good deed goes unpunished, or rather a good site goes un-copied. Here are some Adult Video sites that I was recently alerted to that bear very close resemblance to YouTube.

PornTube image

Below is the YouTube logo for comparison

YouTube image

They say imitation is the best form of flattery, but I’m not sure if YouTube will find these flattering.

PS. I have not included links to the sites out of decency. But, I’m sure you can figure those out 🙂

HTTP Takes back the Web

After more than four years of taking a backseat to peer-to-peer (P2P) applications, HTTP (Web) traffic has finally become the bandwidth hog of the Internet, according to data released by Ellacoya Networks, a leading provider of Deep Packet Inspection networking equipment. This study was based on usage data from about a million North American broadband subscribers.

Currently, HTTP (Web) is about 46 percent of all traffic on the network, while P2P applications amount for 37 percent, non-HTTP video streaming comprises 3%, and gaming takes up 2 percent.

This surge in HTTP traffic is spearheaded by video traffic. Traditional web page downloads make up 45% of web traffic and streaming video makes up 36% of HTTP traffic. YouTube alone makes up 20% of HTTP traffic.

Interestingly, now YouTube comprises 10% of all Internet traffic.

Accordingly to Ellacoya:

“The way people use the Internet is changing rapidly – from browsing to real-time streaming. We expect to see new applications over the next year that will accelerate this trend.”

The report is available here in PDF format.

Joost makes Strategic Acquisition

Joost CEO Mike VolpiLast week Joost confirmed that former Cisco high-runner Mike Volpi will become the CEO. While its always good news to get a high-profile CEO, there is more to this – I think Joost is positioning itself to be a future acquisition.

Think about it. In May Viacom, CBS, Sequoia Capital, Index Ventures, and the Chinese tycoon, Li Ka-shing, invested a whopping $45 million in Joost. These people have two main ways of getting their money back (along with a nice little premium); IPO or be acquired.

1. The Serial Entreprenuer effect: So why doesn’t the IPO path fit Joost? While any company can take the IPO route, the co-founders, Niklas Zennström and Janus Friis, are serial entrepreneurs…they have already founded two well known companies in Kazaa and Skype, been acquired (Ebay purchase of Skype), and still gone on to start a new company (Joost). These guys have a big say in Joost, and they are more likely to sell Joost off to a worthy suitor and move on to the next big project.

2. Joost needs a CPE Platform: Joost works well on a computer screen and users flock to the Internet for interaction, but the television is (still) the best medium for long form content and advertising for long form content. Joost realizes that to be successful, they have to get on the cable set top box. Plus, Apple TV with Youtube support is already headed that way. Imagine a day when set top boxes are sold separate from the cable company (it’s actually here), then one could get a set-top box and watch Joost as well as get a cable subscription if needed.

Why is Mike Volpi a “Strategic Acquisition”? well, because he knows the cable industry and the networking infrastructure well. For one while at Cisco, he architected the acquisition of Scientific Atlanta and managed the integration into Cisco. Mike is probably the best person to architect an acquisition of Joost by someone like Cisco, or even a Google

Related Articles

Set-top-box makers ramp up CableCard units

If you enjoyed this post, subscribe to my RSS feed for more cool stuff

Raketu Integrated Social Networking, Communications, & IPTV offering shows a bleak picture

Raketu company logoRaketu combines social networking with integrated communications (VoIP calling, IM/SMS, info feeds) and media content (IPTV) – a one-stop shop for online socializing, communication, and entertainment from the desktop PC and mobile phones.

Let’s look at where Raketu stands in each area of social networking, communications, and IPTV.

For VoIP calling, Raketu has phone-to-phone and PC-to-phone calling. Phone-to-phone calling is initiated by entering the “Call to” and “Call from” from a web interface. Raketu plans to launch a mobile application that users can install on a mobile phone to make VoIP calls and send SMS and IM. These guys have really cheap calling rates; free unlimited calls to landlines and mobiles within the US and to 42 countries (limited time offer). Since I call Sri Lanka quite often, I know that the Raketu’s rates to Sri Lanka are really low. If Raketu can offer real cheap calls to Sri Lanka, they can offer cheap calls to anywhere!

However, the VoIP landscape has some well known players such as Gizmo, Fringland, Skype, Jajah, Google Talk, MSN. One could expect new players as well, given the low entry barriers associated with all things Internet.

Now, let’s look at IM and SMS. Raketu can talk to pretty much any IM client (Yahoo, MSN, AIM, ICQ, Google, Skype, Jabber), with conferencing across IM clients. Their secret sauce appears to be very simple; The Raketu application can speak every IM client’s protocol. Again, many of the IM players could easily do that.

When it comes to social network, again, Raketu is very limited. With much better known social networks such as Friendster, Linked In, myspace, and Facebook, Raketu just doesn’t have the momentum to be a leader.

Looking at IPTV, the story is similar. Joost and Babelgum have far better IPTV applications and much better content.

Many companies focus on one service, but Raketu is trying to carve out a niche by integrating social networking, communications, and video. Raketu has the right vision, but the problem is the competition.

Companies such as Joost are well positioned to do the same thing; Joost has a highly coveted IPTV service and has integrated IM (Jabber and Gmail) and news feed services and a “Widget Menu” to house a variety of future applications. Joost is formed by the experienced founders of Skype, who’ve been there and done that when it comes to Peer to Peer technology, VoIP, SMS, and IM. These companies tend to have more market recognition as well.

With all this competition (With Joost and Babelgum and other IM/SMS and VoIP providers), is there room for Raketu? Right now, Raketu does not look well positioned to lead the integrated service offering space.

Related Articles

Raketu review
Raketu to add mobility to Web-based VoIP

If you enjoyed this post, subscribe to my RSS feed for more cool stuff

Babelgum is chewing on Internet TV

Joost, (the other Internet TV business) has company. Check out Babelgum beta, another peer-to-peer Internet TV service that is open for beta testing. The current content is limited, but there’s a good amount of professionally created niche content related to:

Like Joost, the service requires a downloaded client to view the ad-supported channels.

I tried the beta and it works pretty nice – it looks very similar to Joost. it has a really simple and sweet user interface – one should be able to figure out all the buttons in about 5 minutes. I noticed that Joost tends to download in bursts while Babelgum’s was more streaming-like. Nonetheless, both Joost and Babelgum has so far worked well with my aDSL connection.

Babelgum is offering a limited number of daily downloads. Readers of TechUntangled can use this link to download the free beta for Windows XP.

The business model is based on targetted advertising, and will split 50% of ad revenues with content producers. Babelgum is guaranteeing at least $5 for each 1000 unique views of a video till the end of 2007.

Its too early to predict whether Babelgum or Joost or another upstart will be the ultimate champion in Internet TV. I predict that whoever can sign up the most top-notch content will be the winner.

Other Coverage

1. Babelgum opens up for all
2. Hey Joost, Have Some Babelgum
3. Get Your Babelgum Beta Now