I’ve been meaning to follow up on Dave’s Sezmi post. I’ll start by saying that I love the idea of Sezmi, the former Building-B, but I simply can’t imagine how the enterprise will succeed.

As everyone has discovered, video services are entirely dependent on the quality of the transmission systems they use. Sezmi is relying on two transport methods, over-the-air transmission and fixed-line broadband networks. Both Cynthia Brumfield and Glen Dickson pointed out that leasing over-the-air capacity is not as easy as Sezmi has made it out to be. According to Dickson, Sezmi is unlikely to get more than 60 Mbps of capacity in any market, which probably can’t support more than ten HD channels at most even using MPEG-4 compression at very low data rates. Given that folks are complaining about the lack of HD channels with FiOS, how can Sezmi compete with only ten?

On the wired side of the equation there’s even more of a bandwidth issue. Sezmi plans to sell its service through broadband partners (ISPs, telcos without TV service, and some retailers), but if it’s truly successful, the broadband portion is going to place a tremendous strain on the Internet delivery mechanisms (likely not fiber to the home) of those partners. I can just hear cable’s new Slowsky commercials now.

Of course, all of that’s not even taking into account the issue of the content deals Sezmi is negotiating. Video deals are notoriously difficult to arrange, and certainly if cablecos and telcos ever truly sees Sezmi as a threat, no doubt those operators will bring every bit of leverage they have to bear to make sure the content Sezmi gets is not as good or wide-ranging as theirs.

Sezmi is attempting to do two things that consumers are anxious for: provide a cheaper option to cable TV, and create an effective interface that combines broadcast video with Internet video. On the first point, I think it will be blocked at every turn. On the second point, I think the company may show others a way forward, but it’s a problem that all the big guys are already working on, and will bring out their own solutions for when they’re good and ready.

Best of luck to Sezmi. These guys have been really innovative, and deserve huge kudos for trying something new. I wish the obstacles in front of them weren’t quite so daunting.

HBO content lands on iTunes, with variable pricing (based on unknown criteria):

“We’re thrilled to bring this incredible lineup of programming from HBO to the iTunes Store,” said Eddy Cue, Apple’s vice president of iTunes. “Sex and the City,” “The Wire” and “Flight of the Conchords” are $1.99 per episode, and “The Sopranos,” “Deadwood” and “Rome” are priced at $2.99 per episode.

$2.99/episode seems quite high… for older shows (no longer in production). The few times I’ve been motivated to purchase episodes online were series not yet available on DVD, such as Burn Notice. And even though these are purchases, as opposed to rentals, it’s not like you get a ton of replay value - DRM-ed content isn’t easily shared (like a DVD) and you’re not going to stick a 55 minute show into a playlist for repeat enjoyment like a digital song. I suppose the value of an iTunes download is being able to sync content to an iPod or iPhone without ripping, transcoding, etc. Though handheld entertainment has its place, the only folks I see paying for and watching an entire season are those regularly commuting via bus or subway.

Surprisingly, Entourage isn’t initially available for download. Is this a licensing issue and/or is it just a matter of time? (And I doubt shorter shows will be introduced at a new 99 cent tier.) Seems like Apple and HBO would want to eat into the BitTorrent-embracing demographic by getting this series onto iTunes.

Michael Gartenberg believes the introduction of variable pricing opens the door for the return of NBC material to iTunes. And while I’m not entirely opposed to tiered pricing, I expect to see newer or longer content command a premium - rather than HBO’s apparent randomness.

As an aside, I dropped HBO when they couldn’t get Deadwood renewed. Showtime currently provides the best original, commercial-free programming on television now. Incidentally, Showtime also embraced digital downloads early and via multiple destinations/services… which is how I ended up a subscriber.

DivX reported their 1st quarter earnings on Monday and while I’m still waiting to read the actual 10k before digging too far into the numbers, I did want to comment on what I see as a significant shift in strategy. Over the last 7 years, DivX has done an impressive job of building an eco-system around a single file format. The first time that I came across a DivX file, I actually thought that it was some kind of a virus. It took me two weeks before I worked up the courage to download the DivX media player so that I could play the movie, but once I did, I realized that my fears were unfounded. The file not only offered a superior video experience, but it was a lot smaller than the MPEG files that I was used to downloading. Since I was on a dial-up connection at the time, every little byte made a big difference.

As the P2P networks developed, DivX and it’s open source cousin XviD, became an important resource for file sharers. Initially, my own interest in DivX was driven by it’s technological advantages over other video formats, as well as the wide availability of DivX content on the grey market, but as compression technology has evolved, my reasons for using DivX have changed as well. Since I’m no longer on a dial-up network, compression is less important then what I can actually do with my videos.

As DivX gained in popularity, they were able to forge agreements with consumer electronic manufacturers that allowed you to play DivX files on a wide range of devices. Even though, H.264 is a superior standard for internet video, I still prefer DivX files because I know that I’ll be able to play them on the hardware devices that I own.By creating an eco-system that supports portability, DivX has been able to lock me into their format in the same way that Apple has been able to use iTunes to keep their customers buying iPods instead of MP3 players.

(more…)

P2P Bill of Rights Deep-Sixed
After about three weeks, Comcast has abandoned their proposed P2P Bill of Rights in favor of collaboratively developing best practice guidelines within the Distributed Computing Industry Association. As I’ve said before, I’m glad to see them openly discussing these issues. Though, I’m not sure Comcast’s Net non-Neutrality stance has changed… Actions speak louder than words and it appears they’re still throttling BitTorrent traffic.

Pondering Bandwidth Caps
According to DSL Reports, Comcast is contemplating a monthly bandwidth cap of 250GB for residential broadband customers. Exceed the limit, and pay an overage fee, with periodical “slip up” forgiveness. Frankly, I think this would be a good policy change… when compared to their current opaque black ops methods. Though, I say that having no idea how much data I move in a given month and just prior to launching a several day ~40GB Mozy online backup. Supposedly a 250GB threshold would only impact 0.1% of Comcast customers.

SDV Shenanigans
Less clear than Cablevision’s SDV customer outreach, Comcast appears to be going down a similar path in southwest Florida. I haven’t confirmed this notice and it’s rather brief but, if accurate, probably indicates regional adoption of switched digital video (SDV):

Our records indicate that you have a Motorola Cable Card(s) that will no longer be compatible with our upgraded cable network as of May 31, 2008. Exchange your Motorola Cable Card(s) into an office today and we’ll give you HBO free and a converter free for 3 months.

No mention which specific portions of the channel lineup may impact this TiVo owner and no mention of the forthcoming tuning resolver… Just trade in your CableCARDs or else (FUD). I’ll wait for confirmation before providing additional commentary.

A periodic roundup of relevant news… from our other blogs:

• Firefly HTPC Remote Control Review: Brent Evans Geek Tonic
• Grand Theft Auto IV, Diary Entry #1: The Daleisphere
• Grand Theft Auto IV, Diary Entry #2: The Daleisphere
• Cheaper All-Digital, All-HD and All-Switched: Media Experiences 2 Go
• NCTA on Switched Digital Video and CableCARD: Connected Home 2 Go

Mari and I sat in on the Sezmi webcast briefing earlier this week and we’ve been slow in covering the news… As it turns out, this gives me an opportunity to provide some clarity in response to the widespread confusion.

At a high level, Sezmi (formerly Building B) is a video service with the goal of replacing our existing cable or satellite provider (television programming), and enhancing value by providing additional content (think Internet) and new methods of interaction.

Business Model
Consumers won’t be Sezmi’s direct customers. Sezmi’s plan is to offer sidelined broadband providers, telcos, and local television franchises a platform to offer television services (including advertising) without having to roll their own solution. They haven’t announced any distribution partners yet but, with imminent trials and plans to launch by the end of the year, there’s at least one company on the hook. Obviously, Verizon (FiOS TV) and AT&T (Homezone, U-verse) are spoken for. Given the mega quadruple-play alliance dissolution and forthcoming WiMax push, Sprint’s a likely target. I also wouldn’t be surprised to hear of Sezmi going after Qwest or even an Earthlink. Though, perhaps I’m thinking too big here…

Content Distribution
Sezmi will be using a hybrid approach to receive (and in many cases, provide) content including local over-the-air broadcasts, transmission of “cable” channels via leased (or partner/reseller) airwaves (see USDTV, rip), and the Internet. Sezmi hasn’t announced which premium content providers they’ve signed, though the USA Network was featured in the webcast.

Hardware
The initial Sezmi (leased) hardware package consists of an antenna unit which includes 1 terrabyte of storage, set-top box, and remote. The long-term goal is to transform the STB into more of a thin-client with the NAS providing most of the heavy lifting - and supporting multiple STBs throughout the home.

Software
For me, the most interesting portion of the webcast was a live demo of the Sezmi interface/experience - which they’re calling “TV 2.0.” (Many screengrabs below.) In addition to the DVR functionality you’d expect, Sezmi provides some innovative new ways of integrating, organizing, and presenting content. I wouldn’t go so far as saying they bring social networking to the TV (though, that’s one of the things they’re saying), but the per-user playlist plus sharing and community rating features are overdue and appreciated.

Odds
Several folks have asked me if these guys are going to succeed. It’s difficult to handicap the odds without knowing who Sezmi’s initial partners are. Which brings up the probable point of this pre-announcement: drumming up interest on both the potential distributor/reseller side and on the content provider side. Breaking into the TV business as a new player will be difficult (and expensive), and neither building out compelling solutions nor educating customers of the added value is guaranteed against the entrenched players. At the very least, they’ll need to sign resellers with some serious muscle to have a just shot at pulling it off.

Update: Sezmi’s asked me to remove a dozen screengrabs, given non-finalized network deals and evolving interface.

A periodic roundup of relevant news… from our other blogs:

• Comcast Launches AnyRoom: Media Experiences 2 Go
• Mac Mini as Windows HTPC: Brent Evans Geek Tonic
• Grand Theft Gamestop: Davis Freeberg’s Digital Connection
• New Motorola VDSL2 Gateways: Media Experiences 2 Go
• Teaching Time Warner Clear QAM: Brent Evans Geek Tonic
• Femtocells, Region by Region: Media Experiences 2 Go

Canada’s national television network, Global, is now broadcasting in HD in the Metropolitan Toronto and Golden Horseshoe areas of Ontario on their Hamilton (CHCH) and Toronto (CIII) affiliates. Global is Canada’s last major nationwide network to start broadcasting in HD. It was facing a June 2008 hard deadline imposed by the CRTC to begin broadcasting. It had missed previous CRTC-imposed deadlines.

Global (CHCH on 11-1 and CIII on 41-1) follows CTV (CFTO on 9-1), CBC (CBLT on 5-1), CityTV (on 57-1), SunTV (on 66-1), Omni1 (CFMT), Omni2 (CJMT) and CRC (CBC French) all of which had been broadcasting in HD for some time. TV Ontario is not yet broadcasting in HD.

Depending on their southern exposure, Torontonians can also expect to receive ABC (WKBW on 7-1), CBS (WIVB on 4-1), NBC (WGRZ on 2-1), Fox (WUTV on 29-1), PBS (WNED on 43-1), Think Bright (on 43-3), CW (WNLO on 23-1), RTN (retro TV on 7-2) and other U.S. networks broadcasting in HD from up-state New York.

All these channels are available free to anyone in Metro Toronto that has an inexpensive UHF antenna and an HDTV or other settop box with an ATSC tuner (a.k.a. HDTV tuner). Many HDTVs have ATSC tuners built in as do TiVo HD and TiVo Series 3 units.

Read the rest of this entry at The Daleisphere »