Applications Archive

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Connected Car, Other Apps Signal 4G Will Reshape Business Models

By
Fred
Posted in: Applications, Mobile

Chris Carfagnini, director, emerging media & technology, Alcatel-LucentMobile service providers wondering what it will take to avoid commoditization in the years ahead can draw some important clues from the fast-growing ng Connect Program, where new collaborative approaches to business models now include an effort to drive momentum in the connected-car arena.

Launched in February by Alcatel-Lucent the multi-industry ng initiative has drawn 26 participating companies on the premise that the days of service providers' nearly sole reliance on subscriptions and end-user based transactions are coming to an end. "We believe the market is changing to a two-sided business model that also looks up the value chain toward applications developers and content creators," says Chris Carfagnini, director of emerging media and technology at Alcatel-Lucent.

But the many potential players in the value chain are not necessarily aware that 4G mobile technology has overcome bandwidth and latency issues to the point where these new business models are possible. "We looked at that and realized we needed to help operators bring compelling, rich new experiences to the market by identifying who's playing in the digital value chain and making them aware of the new opportunities," Carfagnini says. "We discovered there's tremendous interest from all sides in collaborating to build new applications and services that might otherwise be overlooked."

The ng program has drawn network, device, applications, automotive and content suppliers to development of pre-integrated services in five areas: consumer media and entertainment, digital signage, automotive connectivity, cloud computing, enterprise collaboration and e-health care. Some of the better-known players include Atlantic Records, HP, Samsung, Toyota Motor Sales USA, Sound Blaster supplier Creative, mobile social media firm BuzzMedia, Sanyo products supplier Kyocera Communications and embedded-OS supplier QNX.

"What's different about ng Connect is that we're creating proofs of concepts with technology solutions operating over real end-to-end networking environments," Carfagnini says. "We're letting people touch and play with these applications and feed back to us what's valuable and what's not, which will help us to solidify the value chain for commercial rollouts,"

Alcatel-Lucent is operating demonstration facilities in Ottawa, Dallas, Murray Hill, N.J., Stuttgart, Germany, Paris and Villaceaux, France where participants' customers and investment backers can witness the full scope of what can be done with these pre-integrated solutions. So far nine collaborative demonstrations have been organized by various combinations of ng Connect members.

In a prime example of the complex ecosystem partnerships that are likely to drive service providers' new 4G revenue opportunities, the program's latest initiative, LTE Car Connect, engages Toyota,  QNX, Alcatel-Lucent, Atlantic Records, widget supplier chumby and Kabillion, a provider of multimedia content for children.  "With the introduction of the LTE Connected Car concept, the automobile is poised to become the latest mobile platform," asserts Derek Kuhn, vice president for emerging technology and media at Alcatel-Lucent.

The connected-car concept has been building for some time in conjunction with telematics, where internal and external communications systems combine to deliver information about car performance, road and traffic conditions and location at a much higher level of sophistication and utility than was possible in the past.  For example, Ford's new Sync navigation system allows drivers to use voice commands to input destinations and then provides audio as well as visually displayed "turn-by-turn" traffic-optimized directions, including notifications about accidents, road closures and other obstacles.

Telematics has also been widely used in stolen vehicle recovery, notes Joe Bedolla, automotive business development director at TeleVav, the supplier of Ford's Sync platform and many other mobile-delivered location-based applications. "Studies show that in-vehicle telematics can increase the recovery rate of stolen vehicles from 62 percent to 80 percent," Bedolla says in a recent blog.

But these applications are just the beginning, he adds. "We know consumers want further integration between their vehicle and their connected devices around features other than safety and security," he says. "For example, they want integration between their phone-based navigation system and their vehicle rather than two separate systems. We believe the future includes more integration of the mobile environment in the car, improved driver access to information in a safe manner and a true cooperation between onboard vehicle devices and consumer devices."

Many mobile infrastructure suppliers have been making this point at recent trade shows,
where cars outfitted with LTE or WiMAX connectivity and jerry-rigged screens have become commonplace. The ng LTE Connected Car project takes all this to a new level with a Toyota Prius that has been customized by the manufacturer with built-in touchscreens, radio equipment and other assets supporting a wide range of telematic, entertainment and other applications.

"Information, entertainment content and essential data such as traffic updates and the location of preferred retail outlets or service centers can be easily accessed through the use of high bandwidth connectivity, cloud-based interactive applications and the next generation of innovative in-car computing platforms," Kuhn says. To accommodate such capabilities the collaborators in the project have created an app platform similar to the one for the iPhone with a set-up that turns the car into a Wi-Fi hot spot, plays movies on demand and lets passengers compete in multi-player games.

Exploiting the low latency and high-bandwidth of LTE to accommodate access to apps stored in the cloud rather than just the car is a key to the future of the connected car business, Carfagnini notes. "Today auto-centric mobile services don't exist beyond GPS and voice," he says. "Built-in connectivity through the cloud with high bandwidth opens up a whole new market."

The software platform provided by QNX is the heart of the ng cloud-based system. It supports all the infotainment applications, including the real-time operating system, touchscreen user interfaces, streaming media players for YouTube and Pandora, navigation system with Google local search, Bluetooth and portable device connectivity, multimedia playback, hands-free integration, climate controls, Adobe Flash games, application store technology and a virtual mechanic.

Toyota is the first car manufacturer to participate in the connected-car project with ng, but there are many other automotive firms poised to step into the connected car game, Carfagnini notes. "Major OEM car manufacturers are very much involved and reviewing this," he says, adding that another Prius is being prepared for demos at the Mobile World Congress in Barcelona and other European events next year. Stateside, the concept will be demo'd at CES, CTIA Wireless and other shows as well as at various private events.

In-house research shows that 50 percent of surveyed consumers find the connected car concept to be "highly appealing" and that over 22 percent are willing to pay for such services, Carfagnini notes. "This research was done without the consumers having any first-hand experience of the connected car," he adds. 

As a result, Alcatel-Lucent is convinced there's huge money-making potential for all participants, including service providers, auto dealers and manufacturers and suppliers of content and applications. Along with opening a fourth screen for established applications, the unique in-car environment provides a whole new range of applications and service capabilities.

For example, he suggests e-commerce and advertising applications associated with location awareness represent new revenue streams for all players. Electronic sell through for movie and game suppliers, maintenance scheduling apps that more tightly link customers to dealers and extensions of IPTV services to back-seat viewers are other examples of the opportunities at hand.

"The [car manufacturers] we've been involved with so far are really jazzed about this, in part because they recognize their competitors are going to be introducing connected cars," Carfagnini says. "With auto development cycles running to three years, the time to produce connected vehicles aligns well with when the LTE footprint will be well laid out. We're expecting to see this technology on a diverse array of car lots in that timeframe."

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Adobe Moves Afford Video Much Bigger Play in Mobile

By
charlie
Posted in: Applications, Mobile

October 7, 2009 – The role of mobile in video content distribution took a big leap forward early this month with a series of announcements tied to the beta release of Adobe’s Flash Player 10.1 software for smartphones, smartbooks, netbooks, PCs and other Internet-connected devices.

Leveraging an alliance of major players such as Microsoft, Google, Nokia, Qualcomm, Motorola, Research in Motion and many others engaged in the Open Screen Project, Adobe’s move assures the market of a consistent runtime environment for uncompromised Web browsing of expressive applications, content and high definition videos across devices, says David Wadhwani, general manager and vice president of Adobe’s Platform Business Unit. “With Flash Player moving to new mobile platforms, users will be able to experience virtually all Flash technology-based Web content and applications wherever they are,” Wadhwani says.

Adobe also broke through the application development wall around Apple’s iPhone with news that the latest version of the company’s Flash Professional CS5 development toolkit will enable developers to create interactive apps for the iPhone and iPod Touch. At Adobe’s MAX developers’ conference in Los Angeles officials demonstrated how developers can now export applications for the iPhone by leveraging the same source code used to deliver applications across desktops and devices for various Flash platform runtimes, which opens iPhone development to millions of designers and developers who currently use Flash authoring tools.

Where video content is concerned, the Adobe Flash 10.1 runtime is going to “release an amazing wave of video consumption,” says Jeff Whatcott, senior vice president of marketing at Web publishing services company Brightcove, which is one of the more than 50 entities participating in the Open Screen Project. “Some of our customers have created iPhone applications that they’ve rolled out to deliver with video, including Fox, Discovery, Arts %26 Entertainment and others. But generally everybody wants to deliver video content on mobile.”

As Whatcott notes, getting that content to users will no longer require standalone apps developed for proprietary platforms or specialty on-deck implementations. It will simply be a matter of users accessing normal Web pages with the ads intact. “Every device that’s a reasonable device for using on the Web is going to have great video capabilities,” he says. “It’s the open Web.”

Of course, it’s not quite that simple, given the level of effort that’s required across all the mobile operating systems and devices to ensure compatibility with the Flash video running on the Web or anywhere else. Wadhwani says a public developer beta of the browser-based Flash 10.1 runtime is expected to be available for Windows Mobile, Palm webOS and desktop operating systems including Windows, Macintosh and Linux later this year. Public betas for Google Android and Symbian OS are expected to be available in early 2010.

In addition, Adobe and RIM announced a joint collaboration to bring Flash Player to Blackberry smartphones. Using the productive Web programming model of the Flash platform, the browser-based runtime enables millions of designers and developers to reuse code and assets and reduce the cost of creating, testing and deploying content across different operating systems and browsers, Wadhwani notes.

Getting to ubiquity with applications beyond straight Web video will require still more work.
“While we applaud this first step that Adobe has taken to make it easier for developers to build native iPhone applications, our experience has shown that delivering a truly compelling Flash experience on mobile phones requires a deep understanding of the unique constraints and capabilities of each device type,” says Dominique Jodoin, CEO and president of Bluestreak Technology, supplier of technology that provides the customization options necessary to overcome the unique constraints of set-top boxes, mobile phones, digital televisions and other consumer electronic devices.

“The iPhone is a hugely popular device, but we must remember that there are more than 1,100 different mobile phone models in the U.S. market alone,” Jodoin says. “Any company or developer that wants to deploy successful Flash-powered applications will require the customization options necessary to run across everything from entry-level devices to the highest-end smartphones. One size simply does not fit all when it comes to mobile devices.”

Video-rich applications have become a major component of the developments spawned through the $10 million in seed money put up by Adobe and Nokia in the Open Screen Project Fund, an initiative launched in February that has now funded more than 35 multi-screen applications efforts with many more in queue, according to Matt Collins, director of strategic and services marketing for Forum Nokia’s developer community. Development of such applications along with access to Web-based Flash video content via mobile devices stands to become a major incentive to consumer adaptation to larger-screen handhelds like the new Nokia N900, which, with an approximately 4.5-inch screen, offers a much better viewing experience that iPhones and other current-generation smartphones.

Adding to the momentum behind video-centric applications development in the Nokia space is the development of a progressive download capability by Nokia’s Flash expert Robert Burdick, Collins notes. By avoiding reliance on real-time streaming over bandwidth-constrained mobile access networks the innovation provides a near real-time experience at persistently high quality, he says.

“Our CNN International video player application is a good example of what can be done to foster long-form video viewing on mobile devices,” Collins says. Available in Europe, Asia, the Middle East and parts of Africa, the CNN service provides mobile users access to a vast content library that is kept up to date to provide people video news they otherwise would not be able to see. “What you’re getting is an extension of CNN’s library not in 30-second bites, but in three- or four-minute regular news segments,” Collins notes. He cites recent movie trailer applications from India’s Bollywood studios as another example now in play.

“Through our implementation of Flash Lite developers will be able to offer a higher quality of video experience without needing a dedicated server to do that,” Collins adds, noting that Nokia alone now has 100 different Flash devices now in use by some 400 million customers worldwide. “On the N900 you’ll have the ability to enjoy on a high-resolution screen the same Internet you’d get on your desktop.”

“Consumers just want content, applications and services to work and don’t want to worry about compatibility, screen-size resolution or the underlying platform or technologies,” he continues. “The Open Screen Project is certainly targeting that gap between consumer expectations and the reality they’ve had to deal with. Flash is the perfect rallying platform to address that gap because of its consistency and ubiquity.”

Developers funded through the joint Open Screen Project Fund must meet the stipulation that their apps will run on at least one Nokia device. But the goal is to extend the reach of their apps across as broad a swath of the device manufacturing ecosystem as possible, Collins says.

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Europeans Take Major Step Toward Driving Web-to-TV

By
Fred
Posted in: Applications, Internet

A European consortium of leading players in broadcast, consumer electronics and technology has reached agreement on a de facto standard aimed at driving Web-based content to the TV in France and Germany and possibly other areas of Europe.

Known as Hybrid Broadcast Broadband TV (HbbTV), the new specification draws on elements of existing standards and Web technologies to create a means of marrying broadband and broadcast delivery of content. This will make it easier for consumer electronics manufacturers to market new connected HDTV sets and for free-to-air and other digital service providers to enhance their offerings, says Klaus Illgner-Fehns, managing director of the Institut für Rundfunktechnik, a German research organization.

"By making the most of today's hybrid receivers, HbbTV merges broadcasting and broadband services seamlessly to deliver value-added content such as Web and on demand in addition to traditional linear broadcast TV," Illgner-Fehns says. "HbbTV not only allows service providers to enrich their offering, but results in considerable benefits to the end consumer who will no longer be challenged by usability issues across multiple platforms."

HbbTV activity in Germany is off to a fast start by virtue of its use as the supporting technology for enhanced HD electronic programming guides and HD interactive services, which German broadcasters have introduced this year in conjunction with the launch of HDTV services, Illgner-Fehns notes. "HbbTV will build on the success of the existing SD teletext service, which is used by more than 14 million consumers each day in Germany, by providing a high-quality video text service more suited to HD receivers," he says.

Along with Institut für Rundfunktechnik, the cross-industry consortium includes French broadcasters Canal+, France Televisions and TF1, satellite operator SES ASTRA, manufacturers Philips Electronics, Humax and Kaon and the software and media solutions providers ANT and OpenTV.

In France the HD-Forum, working with government agencies, is taking a lead role in making use of the new specification to drive the development and promotion of Digital HDTV, says Frédéric Tapissier, president of the forum's technical committee. "A key advantage for HbbTV is the ability to mix broadcast and online services while retaining the broadcasters' control," Tapissier says. "We plan to quickly agree on an IPR [intellectual property rights] regime that benefits the entire value chain so that we can deploy an interactive version of TNT, the French DTT platform, in 2010."

As explained by Joel Zdepski, senior vice president and general manager for middleware at OpenTV, HbbTV evolved out of separate initiatives underway for some time in Germany and France. "HbbTV is a synthesis of standards based on the requirements of the French, which emphasized a broadcast HTML component, and the Germans, which emphasized the broadband-connected side for digital receivers," Zdepski says.

"About 18 months ago we began working with TF1 on a specification that they wanted to promulgate in the French market on free-to-air delivery platforms," he explains. "So we concentrated on HTML and JavaScript standards but with additions to facilitate tuning set-top boxes and getting rid of presentations that have idiosyncratic behaviors.

"Independently and simultaneously," he continues, "ARD Channel 1 and ZBF Channel 2, two primary broadcasters in Germany, were working on another HTML set of specs with their partners. They were concentrating on connected TV sets, either for accessing media within the home or for over-the-top VOD." IPTV middleware provide AMP was a leading supplier in this effort.

Essentially HbbTV provides a set of TV-directed tools that comport with the coding processes they use in developing Web content and applications. While they still will have to develop the TV apps as a separate step, they will avoid having to use completely separate platforms, Zdepski says.

"Developers who do Web content design and use Web tools can now go through the normal design process, and the content can be included as an ancillary seed in broadcast TV," he says. "They'll develop specifically for TV but use the tool chain they're familiar with, and consequently dual purposing is much easier. So, for example, a VOD portal will have a dual output, one allowing you to view the content on your TV and the other for viewing on the PC. Packaging for broadcast and broadband playouts is now much more straightforward."

There are indications adaptation to HbbTV will spread beyond France and Germany, which could have a big impact on the ability of CE manufacturers to implement value-added marketing incentives by providing Web-based content to connected HDTV sets. "The EBU [European Broadcast Union] is interested in the spec," Zdepksi says. "You need broadcasters to commit to content creation so that CE brands know when they want to differentiate their product with access to the Web, consumers will know there's some content out there that will be compelling."

HDTV is just beginning to take hold in Europe, where, to date, HDTV flat panels have been purchased primarily to enhance the viewing experience on PAL (European standard definition) programming. With so many individual markets with different national broadcasters using different approaches to digital programming the absence of a uniform approach to enabling Web-based TV content creates a barrier to scaling a content base sufficient to serving the needs of CE manufacturers.

"The initiative taken in the German and French markets will provide consumer device manufacturers with the economies of scale they need to produce connected HDTVs, which they can leverage to reach other markets," Zdepski says. "Whether or not national broadcasters in other countries will make content available remains to be seen. But the effect of the EBU's interest is good and promises that consideration will be given to taking HbbTV to a broader market."

Activating the capabilities for EPGs, accessing Web content, interactivity and other enhancements made possible by HbbTV will not be a major cost burden for manufacturers of  flat-panel HDTVs. "There's no hardware modification that's going to be required other than that if the box is accessing the online segment it may need wireless or wireline networking connectivity to the data service in the home," Zdepski says. "But all the new sets
have CPUs and memory and all can receive digital transport from the tuner. They'll just need the software stack to receive the content."

Creating a specification that accommodates all the content access, display and interactivity components essential to developers and CPE suppliers alike is a complex task. For example, differences in Web browsers requiring use of proprietary tags have been a stumbling block in previous efforts to standardize in this arena, Zdepski notes. But advances supporting interfaces that overcome these barriers, especially in the W3C (World Wide Web Consortium) standards and Ajax (Asynchronous JavaScript and XML) applications platform, have been exploited by HbbTV to simplify things for developers.

There were also significant hurdles to be overcome with respect to TV tuning, retrieving DVR content lists and connecting to and retrieving offerings from VOD portals. By virtue of the work done in standards bodies like the Open IPTV Forum and W3C as well as the contributions made by AMP and OpenTV, developers of HbbTV have been able to create a highly useful spec that's worlds ahead of previous efforts. "The problem space is a bit different now, and I think that over time this spec will have new versions and grow," Zdepski says.

OpenTV, while best known for its interactive software for the pay TV market, has also been supplying an HTML browser-based solution for use by CE manufacturers, especially in Japan, he adds. "We do supply software to the CE market for the consumption and rendering of free-to-air broadcast content, so we're very familiar with that market," he says. "Not all TV sets in Japan have the same level of broadcast online portal accessibility. So this provides CE suppliers a means of offering a differentiated set of products. We'd like to see if this approach can be replicated around the world."

HbbTV will help that process very soon now that German broadcasters have committed to start preparing content that will be in compliance with the specs before the end of the year. French content companies are targeting producing content next year. "I think it's coming together, and we expect to see consumer devices that support HbbTV in the same time frame," Zdepski says.

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Absence of Standards Dampens Web Video Business Prospects

By
Fred
Posted in: Applications, Internet

Ben Weinberger, CEO, DigitalsmithsWhile Web video may be the fastest growing entertainment medium in terms of ad dollars and eyeballs, it's not immune to the interoperability challenges that more mature media industries have had to overcome.

The Internet TV business is quickly learning that for it to grow from wobbly toddler to a full-fledged adult, it'll need standards, just like the television and service provider businesses have implemented along the way. Web video technology firms, ad agencies and standards bodies are quickly coming to terms with the need for guidelines across rights management, formats, file size, ingest processes and metrics.

Online video should earn $699 million in ad dollars this year and $1 billion by 2011, according to media agency Magna. While the market is growing by about 40 percent per year by most estimates, it's still tiny compared to other media.

For Web video to take a seat at the big boy's table, it'll need a little discipline. Technology and research firms like Digitalsmiths and Quantcast are working with Web producers, ad agencies and Web publishers to develop standards in tandem with consortia like the Internet Advertising Bureau and the Online Video ROI Council.

For starters, content owners and technology firms need to work together on rights management, experts say. This is a vital area in the online world that became a flashpoint during the writer's strike of 2008, which was waged over rights and payments for content in new media venues. Rights have also been an issue for Hulu and other video aggregators that sometimes tussle with studios over how long shows and episodes can run online.

While most experts have given up on the idea of creating an interoperable universal DRM domain there are other aspects to rights management that can be streamlined and standardized. For example, the business model challenges with rights can be cumbersome for the folks managing the delivery of the video to different sites too.

"Rights management needs to be standardized so video players can operate more efficiently," says Ben Weinberger, CEO of online video technology firm Digitalsmiths. "[That means] not having to manually check asset rights or have an operator create some unique way of interpreting those rights. For example, if you knew certain music clearance rights, and those were built into standard feed or other method of packaging with the video asset, you could give consumers control to manipulate and distribute content without worrying if certain music or other issues would be violated."

In addition, technology vendors need to align with advertisers and Web sites for consistent ad formats, says Adam Gerber, chief marketing officer for online audience measurement firm Quantcast. "We need scalable third-party ad-serving solutions for the video space, so that creative can be efficiently delivered in a format-agnostic way," Gerber notes.

What's more, content creators, distributors and destinations need an easy and standardized way to inform third parties, including measurement services that deliver data about the content and player environment in which ads are being served.

The business also needs consistent guidelines for non-traditional ads, such as overlays and brand integration deals. Some guidelines in position, size and duration would help the industry manage a complex ad model, Gerber adds.

Most of these are relatively short-term issues that will likely be resolved in the next 12 to 18 months given the number of industry players focused on them, he predicts. Agencies especially are pushing for standards because the ease of use that standards afford will bring more marketers to the business.

Developing effecting reporting on the non-linear ad models is going to take more time though.

"There's a lot of experimentation going on right now, but from an industry perspective, content distribution, consumer behavior and evolution of creative and format solutions need to precede any kind of broad solution for this topic," Gerber says. "We're still in the early stages of 'telescoping' non-linear formats in my opinion. And ultimately, the TV set comes into play here: how these things evolve on the screen in the living room."

But the task of standardization is complicated because distribution sites and players are often changing specs for data feeds and file formats, Weinberger adds. "There are rarely two groups that use the same specs. We are constantly bombarded with distribution partners changing specifications on data feeds (MRSS/XML) as well as transcoding file formats. They don't all follow each other.

"This creates tremendous resource waste on all parties," he continues. "Data feeds are screaming for standardization. Imagine if a content owner could send a standard data feed to a partner and that partner would use the elements they deem necessary."

Standards would help developers too. With more consistency, developers could create unique applications to help build an audience and know the feed will be compatible, Weinberger explains. "For example, recommendations engines would all understand how to read incoming data no matter who sent it," he says. "Search engines would all interpret data the same way. Targeting engines would interpret data equally."

Beyond technology, the agencies and content producers also want easier to understand metrics on who's watching what online. Right now, there's no standard for reporting back to advertisers: some sites report return on engagement, some clicks, some views and some unique visitors.

Even the most common metric – a view – is up for grabs. Revision3 counts a view as only a full view, meaning the user watched the entire video. Others count a view if a video has been watched for at least three seconds. Still other sites start videos automatically when a user lands on the page, known as "auto play."

Most Web video experts aren't fond of auto plays. For one, most viewers don't like videos that start without their control. And most viewers turn such videos off, making the view meaningless.
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Apple Puts iPhone in Position To Compete as Video Platform

By
charlie
Posted in: Applications, Mobile

June 8, 2009 – With new advancements coming to the iPhone later this month, the popular smartphone is on a path to become a competitor – albeit in miniature – to cable, satellite and telco providers. And everyone else too.

At the Worldwide Developers Conference in San Francisco in early June Apple said the newest version will transform the iPhone into a full-fledged media portal and place it in the crosshairs of traditional service providers as well as big online video portals like YouTube and Hulu. The iPhone 3G S, slated for rollout June 17, lets users record and edit videos and download for rent or purchase TV shows and movies directly on the device itself.

That’s a change from previous iPhones, which required users to download shows to their computers and then synch to their mobile devices through iTunes. What’s more, the new phone also supports live streaming of TV networks. Some developers showcased live video feeds from networks like CNN at the conference.

These developments further the position of the iPhone in the advanced cell phone market, but they also elevate the device to a broader consumer play. The ability to easily buy longer-form videos and to potentially watch TV networks on the iPhone could lure some consumers away from traditional service providers.

“It’s becoming competitive for people to use it for media consumption because once people get used to buying stuff on their iPhones they get used to it for other things too,” said Alex Lindsay, an Apple expert and the host of the Web show “MacBreak Weekly.”

But don’t expect consumers to ditch their cable en masse. After all, the iPhone screen is smaller, the phone is expensive and consumers will still have to pay to download shows. Also, it was not immediately clear which TV networks would strike deals to stream their programming live.

The iPhone’s open platform could become another venue for traditional providers’ online projects, such as Comcast’s Fancast or even time Warner’s TV Everywhere, speculated Andy Beach, author of “Real World Video Compression” and an Apple expert.

Plus, if the Internet has taught us anything it’s that consumers are gravitating to a multitude of devices rather than just one. So while the newest iPhone has more bells and whistles for video viewing, those new tools are likely to appeal to people who would already have dumped traditional service providers for new media sources, Beach said.

Even so, the new iPhone should not be underestimated, said Lindsay. “The iPhone is becoming a standard,” Lindsay said. “What’s happening is it’s becoming the interface to people’s equipment. They will use it for GPS, to control their guitar amps, for watching TV shows. The hardest thing to do for people developing products is to create an interface that works well. Apple gives developers a way to do that, and the iPhone is getting used for more and more things.”

The souped-up iPhone may steal some thunder from consumer electronics makers. Video creators can now shoot and edit with the iPhone, and that could hurt Cisco-owned Flip, the popular handheld video camera. Tim Street, executive provider with production shop Ape Digital, said he’s been considering upgrading his Flip camera and now may switch to the new iPhone since it will have shooting capabilities.

Users can then upload those videos directly to YouTube.

The new phone also includes support for 3G networks. The new phones start at $199. Apple has sold more than 40 million iPhones and iPod Touches.

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Smartphone App Explosion Defies Economic Downturn

By
charlie
Posted in: Applications, Mobile

History Channel app on the iPhone

History Channel app on the iPhone

April 13, 2009 – Media companies and TV networks may be under economic pressure to scale back traditional projects, but they’re doing anything but when it comes to exploiting consumer demand for applications on the iPhone.
 

With evidence mounting that the smartphone platform represents a key growth area for brands, TV networks and content creators, programmers small and large are pouring ever more money into developing apps for the white-hot iPhone business and for other smartphone storefronts as well. Apple’s most recent financials placed fourth quarter iPhone sales at 4.3 million, an 88 percent rise over the year-ago period. For all of 2008, the company sold nearly 14 million phones.

Consumer response to the launch of the iPhone apps store last year has been a vivid demonstration that the long-anticipated market for interactivity and advanced apps that augment the entertainment experience and add convenience to people’s lives really exists. Apple, reporting more than 800 million downloads of apps so far, has discovered what it takes to bring that market alive – a compelling form factor in combination with mobility on a high-speed network.

“Digital platforms, especially smartphones, are a great way to launch new brands and products,” says Jon Vlassopulos, CEO of digital agency Moderati, which has created iPhone apps for A%26E Television Networks and the brand Zippo. “There is a need more than ever to deliver branded experiences to consumers to help them break through all the media noise and get content and information that matters to them in easy, digestible bites.”

Content makers like the iPhone because of the promise of new revenue streams. Programmers get 70 percent of the revenue from downloads with Apple keeping the rest. But the market goes well beyond the iPhone.

Blackberry wants a piece of the action and launched its app store in early April, while Google’s Android Market app store has been running for a few months. Next up, look for Nokia, Palm and Microsoft to introduce apps for their smartphones. Programmers are gravitating to any venue posting positive numbers during the recession.

Many TV networks such as VH1, ABC News and TNT have already introduced iPhone apps. More are to come from networks, movie studios, Web shows, independent publishers and individuals who see dollar signs when they look at the iPhone. For example, in early April, A%26E launched its first iPhone app for History Channel, the Web series “DadLabs” started distributing its show via an iPhone app in addition to existing Web channels, and Paramount Digital planned to debut an app for the 1986 movie “Top Gun.”

“The Apple iPhone app environment provides a place where viewers and consumers of our content can access a more immersive level of engagement with our brands, be it through gaming, interactivity or deeper exploration of historical topics,” says Steve Ronson, executive vice president of enterprises at A%26E. He says the network group is actively developing free and paid iPhone apps across its brands.

The new apps build on A%26E’s already successful launch earlier this year of the free
Paranormal State EMF Reader for the A%26E series “Paranormal State.” After a February rollout, the app has now generated more than 80,000 downloads.

“We plan to roll out a number of apps over the summer, timed with series premieres and expect our first paid apps to roll out in the fourth quarter,” Ronson says. “These apps will provide a multi-media experience to users and will feature video clips, images and text, allowing us to bring context and entertainment to the subject matter.”

Now A%26E is moving beyond the iPhone. “We are speaking with other mobile platforms about developing apps and hope to announce some initiatives later this year,” Ronson says.

Other media companies like NBC Universal and MTV Networks say they too are working to capitalize on this iPhone-stoked demand for mobile video, apps and features. They’re doing this both by optimizing Web sites for cell phone viewing and by developing new offerings for the iPhone app store and for those from Blackberry and Google Android.

“People spend more time on the Internet on the iPhone, and because of that more people are watching video, doing their banking, checking weather,” says Greg Clayman, executive vice president of digital distribution for MTV Networks. “Across the board mobile usage is rising and with it mobile video usage is rising.”

That’s spurred MTV networks to tweak its Web sites to be iPhone- and smartphone-friendly, he says. MTV also plans to launch more apps like the “SpongeBob Tickler” for $1.99 on iPhones, which is an animated version of the popular character that users can shake, poke or tickle, Clayman says.

The iPhone also can expand the reach of a show, which is why the independent parenting advice Web show “DadLabs” introduced its iPhone app. “We are able to reach our audience when they are away from their computer or TV as well as introduce our content to an entirely new set of dads,” says Clay Nichols, chief creative director of “DadLabs.”

Paramount Digital Entertainment is also keen on the iPhone app opportunity. The digital division of the movie studio has already launched apps for movies “Ironman,” “Saturday Night Fever,” “School of Rock,” “Days of Thunder” and “Shooter” on the iPhone. Next up will be an app for “Top Gun.”

“[We] expect additional releases and future development to continue as the platform matures,” says Matt Chandler, vice president of interactive development at Paramount Pictures. “iPhone/iTouch is still not quite a year old and has done a remarkable job.” He says Paramount decided to target the iPhone market “because the platform’s developer-friendly approach allowed us to publish our own titles and establish a presence in the market and with consumers that Paramount makes great games.”

It’s also a proving ground of sorts for the relatively young Paramount unit, because the iPhone offers a venue to build out the production processes for Paramount digital properties, Chandler says.

Of course, just because anyone can make an iPhone app doesn’t mean everyone should. “It has to be the right kind of app that people are going to want to/need to use on the go, not just a mobile version of my Web site, but something tied to an action that helps to simply my life when on the go and away from computers,” says Wadooah Wali, spokesperson for Demand Media, which produces the health-centric site Livestrong.com

For Demand Media its Livestrong.com iPhone app has offered a way to help grow the site’s audience, she says. “Some folks found our TheDailyPlate feature on Livestrong.com for the first time ever via the app store,” she says. “The more they engaged and loved it, the more they wanted to learn about it. Basically, the iPhone app is helping drive conversions from app lovers to actual site users and vice versa.”

Viewer loyalty is valuable, but apps can also generate additional revenue that feeds the bottom line. Not all apps have a price tag attached, but many do, usually in the range of $.99 or $1.99. Any incremental revenue helps, especially in tough economic times, Wali says.

Cisco Systems is forecasting mobile traffic will by a factor of 66 in the next five years, and the primary driver will be video, according to Will Richmond, analyst with VideoNuze. Video on cell phones is projected to account for 64 percent of all traffic to mobile phones in 2013. And smartphones, like the iPhone, new Blackberries and the Google Android, will drive this growth.

In addition, the iPhone will likely drive purchases of competitors’ smartphones too, says Craig Vaughan, a senior executive in business development at talent agency Creative Artists Agency. “If I’m a handset maker I need an appropriately priced handset in the market around $150 to $200 that has features like the iPhone, a screen for video and a fast connection,” he says.

Salil Dalvi, senior vice president of mobile platform development for NBC Universal, is betting on that growth. “Google, Apple, Blackberry are all pushing the quality of these devices,” he says. “These guys are out there advocating for the adoption of those services, of the devices. Our job is to produce programming where consumers are. We are focusing on Smartphone users with more video, more rich graphics, more things you can only see on a flat screen because the usage is coming from those phones that are well served for programming,” he says.

Remember too that smartphones give programmers a direct-to-consumer connection, MTV’s Clayman says. “The iPhone was one of the first open platforms that allowed you to create apps and get them directly to consumers through the storefront,” he notes. “That model also exists for Blackberry and Palm. So if I can take an app and develop for three to four main platforms and Android, that’s pretty cool. And you are only bounded by your creativity.”

Paramount will likely broaden beyond the iPhone and is currently considering adding its apps to Android, Palm and Nokia’s stores. Chandler says Paramount is also watching app development efforts from carriers themselves.

An iPhone app can also serve a business-to-business function for a TV network. Showtime introduced an iPhone application in April for voting members of the Academy of Television Arts and Sciences to check out eligible shows like “Weeds,” “Dexter” and “United States of Tara” on their iPhone or iPod Touch. The effort builds on Showtime’s landmark campaign last year, when it loaded up its shows online for voter consideration, making landfills around the world a bit smaller. The network has saved tens of thousands of dollars by ditching DVD screeners, though Showtime still supplies actual DVDs if voters request them, Showtime says.

Small businesses like the app business too. Tennessee-based Magellan Press introduced the travel app LocalEats, and it’s been one of the top ten paid travel apps on the iPhone. It spotlights top independent restaurants across the country, says Pat Embry, editorial director of Where the Locals Eat/Magellan Press.

The restaurant Full Moon BBQ in Alabaster, Ala. is considering developing an iPhone app that will place orders and list menu items. Then there’s the app Parent ICE developed by a stay-at-home mom. It lists emergency contacts for a child along with medications, conditions and allergies.

Ultimately, the development work is underway because most iPhone users seem to love their phones. Doug Walker, an Apple fan in the Bay Area counts these apps on his iPhone: Evernote, Facebook, Google, Netflix, USA Today, AP, Skype, Amazon, Craigslist, Boxee, BART, Last.FM, AOL Radio, ABC News, Target, TV.com, WordPress, YellowPages, NY Times, Flickr. “Remember, the biggest thing that the iPhone has going for it over any other platform that I have seen is the user experience. Anytime you can make the experience better for your prospective customer, it’s all good,” he said.

0

Web Video ROI Prospects Improve, Challenging SPs

By
Fred
Posted in: Applications, Communications & Social Networking

KliavkoffEver more sophisticated means of driving ad revenues to Internet video are entering the Web publishing domain just as a new burst of over-the-top initiatives is opening more ways for such content to make it to the TV set.

In this new advertising environment, tools supporting addressable placements tied to user tastes and demographics are engendering advances in the over-the-top TV space that advertisers and programmers have long been searching for in traditional linear and on-demand TV programming. Advertising will be facilitated as well by new approaches to viral marketing of professionally produced video across social networking sites with mechanisms to assure advertisers that the content is being exposed in legitimate ways and is therefore safe for ad placements.

Just how worrisome such developments should be to entrenched service provider and media interests is a matter of dispute. "The biggest challenge for big media companies is the misconception that it's a zero sum game," says George Kliavkoff, chief digital officer at NBC Universal, which has been an aggressive proponent of programming distribution over the Web through its own site and Hulu, its joint venture with News Corp.

"It's just the opposite," Kliavkoff says. "The Internet drives viewership on TV. There is a long-term issue of whether there's going to be an adverse effect on the traditional syndication market, but, right now, Web distribution of our content is proving to be advantageous to viewership."

Peter Stern, executive vice president for strategy and product management at Time Warner Cable, isn't so sure. Over-the-top content replicating cable TV subscription content "absolutely does concern Time Warner Cable," Stern says. "Free is a good deal. If people can find a way to get content without paying for it, they will."

The barriers to getting access to such content through the TV will fall, Stern says, Consequently, the task for service provides and programmers is to come up with a mutually beneficial business model that protects subscription revenues while providing customers access to content when and where they want it.

"The answer lies with programmers," Stern says. "They're going through interesting internal debates. Should we put content on the Web for free or hold back in order to preserve our $25-$30 billion subscription business? The model where they put everything online for free and rely on advertising is going to be challenging."
Instead, he says, programmers should develop strategies that recognize the benefits of subscription models in the context of service providers' taking steps that deliver maximum value to subscribers. "We at Time Warner Cable think there's a solution," he says. Under TWC's model programmers would allow broadband users who are subscribers to their cable-delivered fare to see the programming on their PCs or other devices. Non-subscribers would only be able to see clips promoting the programming. "Consumers who pay for programming should have an opportunity to see it on any platform," he says.

The pace of developments, however, may be arguing for a less structured approach to sorting out the business models, leaving it to a vast array of players acting in their own best interests to create a new, mutually beneficial marketplace. This is how Scripps Networks, notwithstanding its considerable stake in TV subscription fees, is approaching the rapidly evolving scenario, says Deanna Brown, president of Scripps Networks Digital.

"I'm the disruptive girl," Brown says of the role she assumed at Scripps in 2007 after leaving Yahoo! as general manager of its Media Group Lifestyle unit. "I wasn't hired to protect any sacred cows."

But, she quickly adds, the natural course of self-interest and maintaining a high-profile brand in the cable TV world necessarily means her company is mindful of its priorities in cable. "We're sitting nicely, because we play in both worlds," she says. "We want to make sure the Comcasts and Time Warner Cables of the world do well. The affiliate fees they pay us afford us the ability to create great programs and brands and to leverage those brands across new platforms."
She advises against setting rigid demarcations as to who qualifies to watch a particular piece of Web content or to predict what people will watch on the Web versus what they want to see on TV. "A 22-year-old might not want to watch a 25-minute TV program on the Web," she says. "But she might sit and engage with content on a site for an hour and a half if the one-on-one experience she gets from the Web is compelling.

"It's not just about broadcasting content [on the Web]," she adds. "It's about sharing. Activity around video is the most robust experience for us to explore to encourage that engagement."

Smart exploitation of the potential can even lead to new TV shows, she notes. For example, when Scripps saw that visitors to one of its Web sites wanted to display photos of their homes and solicit comments from other visitors, the company incorporated the idea into programming on its HGTV cable network.

"The cable model won't go away," Brown concludes. But it may have to change dramatically in light of the growing push to drive Web viewing to the TV. One of the widely reported developments at the recent Consumer Electronics Show was the computerization of TVs and other devices to make Web surfing intrinsic to user experiences on multiple platforms. Taiwan manufacturer Asustek, for example, promoted a wall-hung flat screen TV that is also a touch screen computer, and it demonstrated a computerized keyboard that allows TV viewers to access the Internet.

As Jong Woo Park, president of Samsung's digital media business, told The New York Times, "In the next five years we are not only going to provide hardware but [also] content through our devices, in an easy, more convenient way. You will use the same TV and the remote control but have completely different functionality."

As reported elsewhere (p. 10), major consumer manufacturers have engaged with Macrovision to supply its Neon interactive programming guide technology to allow buyers of new TV sets to find and access content from all sources, including the Web and home media centers as well as regular TV programming. As these cross-platform capabilities emerge in the mass market, the perspective on how programming is sold to consumers and monetized through advertising is sure to shift dramatically.

Speaking at CES of the emerging content consumption experience and its implications for business models, Microsoft CEO Steve Ballmer, also quoted in The Times, said, "You ought to expect that to be more and more unified – three screens: TV, phone, PC – one cloud-based experience, live, essentially projecting through consistently, and appropriately, to the three screens."
NBC's Kliavkoff makes clear his company is well positioned to ride these trends while avoiding the "zero-sum" possibilities that haunt some players. As an example of the care NBC uses in avoiding cannibalization even as it liberally promotes viewing through distribution of popular TV programs, he notes that the network does not offer any episodes of "Seinfeld" on the Web, no matter how old, because of the continuing popularity of the show in syndication. At the same time, he adds, the only place NBC's old series "Lost in Space" can be found is on Hulu.
"The market is doing the right thing," he says. "At some point it will make sense for 'Seinfeld' to be available on line."

Ironically, no company has done more to put content suppliers in the business model driver's seat than Comcast, which through a series of acquisitions starting three years ago with its purchase of Web publisher thePlatform has been building a next-generation Web content support infrastructure that could pose significant challenges to the traditional cable TV business model. But Comcast executives have made clear they're evolving the cable model to fit the new market contours, and thePlatform is a big part of ensuring they're doing so from a position of strength at the vortex of market-shaping forces.
 
"thePlatform's mission is to be an open, central hub for managing, monetizing and syndicating video – and providing our customers with the versatility to support their video businesses on PCs, mobile and TV," says Ian Blaine, CEO of thePlatform and senior vice president at Comcast Interactive Media.
Now that Web publishing and syndication through services like those provided by thePlatform have become the norm, there's another sea change coming in the evolving Web video scenario, Blaine says.

"The basic building blocks are in place with the ability to deliver content at the right bit rates to create the right experience everywhere and the ability to wrap usage rights around the content and create a way to monetize through pay or advertising models," he says. "Now the goal is to support massively decentralized access to content, making sure content goes to users wherever they happen to congregate but with centralized control over monetization."

This is doable because the basic publishing and distribution capabilities, including on-the-fly bit rate management, rights management, interaction with established ad placement systems and much else, rely on distribution of player software that's embedded in the content stream. By adding new functionalities to the core platform and to associated plug-ins for content owners to include in the distributed player software, a Web publishing service provider like thePlatform can change the way things are done virtually overnight.

It's clear, Blaine says, that the kinds of capabilities thePlatform is bringing to content exposure and monetization will empower content owners at the expense of traditional modes of Web content aggregation and distribution. Content owners are now able to directly control content distribution channels, the modes of exposing content to end users and the processes to ensure that ad dollars are generated with content exposure wherever it occurs. "Distributors still matter, but their relative importance will shift as consumers flock to new destinations," Blaine says.
 
The driver behind this sea change will be the degree to which viral distribution of content through what Blaine calls "smart syndication" breaks the damn that's been holding back the flow of ad dollars into Web video. "If you look at the number-one issue keeping advertising dollars from flowing to video content, it's the lack of inventory," he says. "There's not enough content available in trusted environments to satisfy advertising demand.

The problem is the preponderance of situations where advertisers can safely place ads without worrying whether the content is being viewed legally consists of high-profile exposures of "short-tail" content. "There's so much viewing on the short tale, there aren't enough views per consumer," Blaine says. "People aren't going to keep watching 'Lost' over and over."

The solution to creating more inventory with more views per consumer is to increase the number of impressions around any given piece of content and to increase the variety of content that is getting exposed, he adds. "You want to allow consumers to generate viral distribution of the content while allowing content owners to retain the controls necessary to generating advertising revenues on those exposures," he says.

thePlatform is supporting this kind of syndication through introduction of advanced recommendation engines and enhanced viral marketing through social sharing of content across social network boundaries. This requires that when a user engages with a video feed, the managed connection "learns" in real time which other files in the content library might be of interest to that viewer and offers those as viewing options as well.

The recommendation engines include an advanced version of contextual recommendation, which traditionally involves peering into video file metadata to suggest video options related to what's being viewed. Blaine says thePlatform is leveraging the work of StreamSage, a company acquired by Comcast in 2005, to broaden the associative triggers by converting speech in the audio stream to text and performing contextual analysis on that as well.
Another category of recommendation engine thePlatform is using relies on "wisdom-of-the-crowd" analysis, a method made famous by Amazon and now used by video suppliers such as Netflix. Here the engine finds associations between content files that might have no contextual relationship but which usage patterns reveal to be appealing to a shared audience. Blaine says that by tracking how people respond to recommendations generated by this type of engine, thePlatform can continually refine the process to more accurately reflect what generates views and what doesn't.
With such recommendation capabilities built into the content flow, the key to maximizing viral marketing of content is to enable connectivity of users across social networking boundaries, which is being facilitated by the new OpenSocial standards promoted by Google (see story, p. 1) and by the Pulse service introduced by Plaxo, a pioneer in social networking acquired by Comcast last year (see p. 36). Pulse allows users to rate and share content with friends, no matter which social networks the affiliations reside in.
 
A content publisher can embed prompts implementing the Plaxo networking functionality in thePlatform's player software, thereby encouraging users who are signed up with Pulse to push links to that content out to all their affiliates. "Between the two organizations, our technologies and teams, we believe we are in a great position to execute against this vision," Blaine says.

While the advances associated with smart syndication with utilization of advanced advertising capabilities greatly expands content owners' control over monetization, these advances can also be leveraged by service providers or other content aggregators, including consumer electronics companies who want to drive device purchases by offering new content experiences to consumers. In other words, even as traditional service provider business models are threatened by these developments, there are new business opportunities to be exploited by adopting new models.

This is especially the case with video on demand, which Kliavokoff says the cable industry has failed to exploit to the fullest extent possible. "Cable has put together great assets for VOD," he says. "It's a business to build from."
One way to do that is to begin melding long tail content from the Web with traditional on-demand programming while building revenue opportunities, including advertising, around the unique user experience that results from sophisticated presentation of all this aggregated content.  "There's a real opportunity here for service providers," Blaine says. "They're in a strong position to blend broadband and TV services together to deliver much greater value to their customers."

0

Digital Studios Discover Middle Man Still Is King

By
Fred
Posted in: Applications, Internet

Jordan Levin, CEO, Generate

Jordan Levin, CEO, Generate

February 13, 2009 – It wasn’t meant to be this way, but a growing contingent of digital studios borne from the philosophy that the Web could democratize television by eliminating the middleman is discovering the road to success leads through the very power houses these low-budget upstarts meant to bypass.

Hollywood’s need to energize the new broadband medium with appealing content has given digital studios the opportunity to achieve mass reach and ROI, setting in motion a new business infrastructure that is breathing fresh life into Web content. Moreover, this is a two-way street where the cross-pollination between digital studios and Hollywood brings with it a potential to transform the TV viewing experience as well.

“Digital studios have the potential to do many things,” says Brent Weinstein, CEO of 60 Frames Entertainment, a venture-funded startup whose shows were viewed more than 50 million times in 2008. “We combine the creative output of an elite group of artists, actors and producers with support from national brand advertisers to create franchiseable media, some of which is migrating to TV and film.”

Digital studios are new media replicas of traditional studios – they’re smaller, faster and more nimbly run, but they play the same role in the digital world. They create programming. And they’ve figured out that for their Web shows to make money they must embrace Hollywood, ink deals with traditional networks and studios and adopt old media’s best practices.

Many of these companies have been built by executives, producers and agents with Hollywood pedigrees, such as writer Brent Friedman’s Electric Farm Entertainment and cable executive Rob Barnett’s MyDamn Channel. Wienstein, before founding 60 Frames, was a senior executive with talent agency UTA.

There are also new production shops and distributors for Web-only shows such as For Your Imagination, Revision3, EQAL and On Networks, among others. They’re joined by digital media efforts from networks themselves, including CBS and NBC, the most aggressive of the broadcasters in pursuing Web originals.

Studios, too, have established digital destinations for original shows, such as Sony Pictures Television’s comedy site Crackle.com and its online network The Minisode Network that carries shortened versions of classic TV shows. Warner Bros. Television launched TheWB.com last year as an online destination for former WB and Warner Bros. shows, such as “Buffy the Vampire Slayer” and “Friends” as well as online originals like “Rockville” and “Sorority Forever.”

They’re setting up digital shops because audiences are migrating to the Web. By late 2008, half of online Americans had watched a TV show on the Internet at some point in the past, double the rate in the fall of 2006, according to research firm Solutions Research Group. That figure is even higher for younger people. About 70 percent of 18 to 34 year-old online Americans have watched a TV show online at some point in the past, while 15 percent visit a network Web site once a month specifically to watch a TV show online.

Of course the lion’s share of viewing still goes to Web originals, including user-generated content. In December, Internet users in the United States viewed a record 14.3 billion online videos – including Web shows, viral videos and TV shows – up 13 percent from the month before, reported online audience measurement service comScore.

The quick scale of Web video is attractive to digital studios, which are eager to cash in on the explosive growth and the new advertising opportunities in reaching those Web-viewing consumers even in a tough economy. eMarketer predicts online video advertising spending, the dominant revenue stream for Web video, will grow 45 percent this year to $850 million. That’s a nice growth trajectory, but it’s still a relatively small overall number, which is why many of the digital firms are hedging their bets by developing multiple revenue streams, from advertising to license fees to international distribution.

Here’s a look at how some of the leading digital studios fared in 2008, especially when it comes to ad deals:

Next New Networks is venture backed to the tune of $23 million and has landed ad deals from Lionsgate Films, Janome, Windows Vista , Starburst and others. The online TV studio just re-upped with Janome this year and also recently ran an online campaign for Warner Brother’s latest “Friday the 13th” installment. Next New Networks is best known for its “Barely Political” network, home to Web superstar Obama Girl. The network earned about 300 million views for all its shows last year.

MyDamnChannel is a scrappy startup with only $3 million in funding, but the company has churned out award-winning Web hits like “You Suck at Photoshop” and “Wainy Days.” Most of the shows on the site cost about $7.000 per finished episode, says CEO Rob Barnett. The company was on track to break even late last year and to turn a profit this quarter because of its lower cost model.

Revision3 has developed some of the most successful tech and lifestyle-centric shows online, such as the popular “Diggnation,” “Tekzilla” and “Scam School.” Those shows helped Revision3 draw 41 million complete views in 2008 for all its shows, translating into 1.2 billion minutes of engagement for the year. Advertisers include Netflix, Virgin American and Bank of America and EA.

For Your Imagination distributes shows such as “DadLabs” and “Real World Green,” which are luring targeted advertisers in Baby Bjorn and Primo Water. FYI relies on ad dollars but also makes money by operating in a work-for-hire capacity to produce Web shows for media companies.

ManiaTV is well funded with $26 million, but the company slashed staff in the fall after investing too heavily in its own hi-def studio and facilities. Mania’s sponsors include Doritos, Coca-Cola, Adidas, Nike, AT%26T, Showtime, Ford, Pepsi, P%26G, Motorola and Wrigley.

Electric Farm Entertainment has produced the profitable Web shows “AfterWorld” and “Gemini Division” and makes money from brand integration, distribution deals, network partnerships and international licensing.

60 Frames Entertainment, with successes like “Douchebag Beach” and “Who What Wear TV,” landed ad deals with marketers such as McDonald’s, Sprint, Saks and Procter %26 Gamble. Late last fall, 60 Frames partnered with NBC to produce Web shows for NBC’s digital studio.

The 60 Frames-NBC deal underscores the growing need for digital studios to link arms with traditional Hollywood. TV networks and studios have deeper pockets, and producers need money to make their shows look good, whether they’re seen online, on mobile phones or on-air. Also, TV networks can amass an audience, and the digital studios need viewers to make their ad deals work. “Sometimes we can’t provide that on our own, so we partner,” Weinstein says.

Getting into business with a network helped Electric Farm’s “Gemini Division” land some of its ad contracts, says Brent Friedman, one of the founders of Electric Farm Entertainment and the executive producer for “Gemini Division.” That show ran in the fall online and has turned a profit for Electric Farm through multiple revenue streams, including advertising deals with Cisco, UPS, Acura and a distribution deal with NBC.com to carry the show.

“By having NBC as a partner with us it made it a lot easier to go to some of these premium brands,” Friedman notes. “Even though NBC wasn’t a proven commodity in the digital space, everyone knew who NBC was and that helped to bring on high level brand sponsorship deals.”

In today’s economy producers need to spread their bets. Former WB CEO Jordan Levin is doing that by inking deals across all mediums for his production shop Generate. Most recently Generate struck a multiyear television development and production deal to create scripted broadcast and cable series for 20th Century Fox Television, a move that helps Generate expand further into the television business.

The company has already established itself as both a Web producer, with online successes like “Pink: The Series,” and as an emerging TV producer, with shows like Comedy Central’s “Chocolate News.” A traditional TV development deal represents another revenue stream for Generate in addition to advertising, Levin says.

It also is a smart move because it shields Generate from the risks of producing for just one medium.
“The focus right now is really on studios and partnerships with distributors to create an environment for advertisers” he explains.

Digital studio EQAL is also pursuing a multi-pronged strategy. The company that stealthily built the first true Web hit in “LonelyGirl15″ is now focusing on production deals with networks. As an example, EQAL is creating a companion Web program for the CBS primetime series “Harper’s Island.” The Web show will be called “Harper’s Globe.”

EQAL’s partnership with CBS brings marketing support and upfront production dollars to the digital studio, says Greg Goodfried, one of the founders of EQAL. For “Harper’s Globe,” the network will drive tune-ins to the Web show on-air. “For us that’s a huge advantage, because I can’t buy that kind of audience,” Goodfried says.

The digital studio is also keen on international distribution. The company licensed a new show in the “Lonelygirl15″ saga to Polish producers Agora and A2 Multimedia. The producers will create more than 100 episodes of the new show, “N1ckola,” each one running one to five minutes, with new installments debuting four to five times each week. The show premiered in January with sponsors including Microsoft, Hasbro, Polkomtel and Samsung.

The licensing agreement reflects an international distribution push by EQAL. “It was always our hope to expand the ‘LG15′ universe into new countries through full-format licensing deals like this one with Agora,” Goodfried says. EQAL will pursue more deals like the one for “N1ckola” in other countries as part of the company’s efforts to diversify its revenue sources.

Long a staple of the television business, foreign sales is drawing the attention of many other digital studios as they seek to drive revenues for their Web content. Electric Farm Entertainment, for example, scored international deals for its 2007 Web show “AfterWorld” via a partnership with Sony Pictures Television International, which handles the foreign rights for Electric Farm’s programming. “Gemini Division” is rolling out in Australia online and on-air on the Sci Fi Channel there, one of many pending international premieres for the digital series. Launches will follow in the United Kingdom, Canada and Germany across broadcast, cable, mobile phones and online portals.

Electric Farm’s Friedman notes the revenue from both ads and international deals makes it possible to produce at a higher level and to attract stars such as Rosario Dawson in “Gemini Division” and Jon Heder, who is fronting Electric Farm’s “Woke Up Dead,” slated for a 2009 release.

One of the first Web studios to pursue international licensing is Michael Eisner’s Vuguru. His company secured foreign rights deals for its Web shows “Prom Queen,” “Sam Has 7 Friends,” “Foreign Body” and “Back on Topps” in countries including Australia, Brazil, Canada, France, Germany, Japan, New Zealand and Scandinavia.

Disney-ABC Television secured an international distribution deal for its original Web series “Squeegees” and “Voicemail” with Microsoft’s MSN in Europe in October. Warner Bros. International Television Distribution licensed TheWB.com’s original digital series “Sorority Forever” in a number of international territories via deals with Bebo in the U.K., MSN in Canada and in France on mobile and video-on-demand with media company Orange, among others.

With the economy in turmoil, digital studios are fighting to survive. That survival will increasingly depend on Hollywood deals and a continued cultivation of multiple revenue streams.

Jordan Levin, CEO, Generate

Jordan Levin, CEO, Generate

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