Internet-based television has TV execs shaking

Well over 50% of homes with Internet access have high-speed Internet access. You can "get" TV on your computer -- sort of. So far, it's been slow and jerky. There hasn't been much content. A lot (maybe most) users don't have a clue about how to get to the content that is there or how to watch it. But advertisers and network execs are nervous. The future isn't here yet, but it's approaching. And it's probably closer than it looks in the mirror.

Andy Marken is a smart guy who's in a position to know a lot about video -- from the hardware that makes things possible to the programming that makes the hardware necessary. And all the stuff in between. According to Marken, "Consumer electronics manufacturers know folks around the globe have gone digital. We’ve got our MP3 players, computers for everyone in the family, home networks, and slowly we're adding HDTV sets. But if we all migrate to IPTV, they have to deal with MPEG 4 decoders, new formats and sets that are just large monitors.

Sony, Matsushita (Panasonic), and a few others will begin marketing Internet TV sets early next year. Kids (These would be Gen Y?) spend more time in front of their computers than in front of televisions. My daughter Kaydee, an art school senior, usually has music playing from her Mac and a couple of IM conversations. The occasional e-mail sends her to YouTube or one of the other video sources to see a clip.

Even I watch more TV on the computer than on the TV. This isn't difficult for me because I probably average less than 30 minutes per week of TV viewing.

"True," says Marken, "the world isn’t all broadband yet. But it is connected. And it's getting faster, slowly."

Last year, 194 million households WW had broadband service. By 2010 the number will increase to 413 million according to In-Stat. The US may have the best Internet products, but the country is still only #12 in the high-speed connected world. Iceland and South Korea lead the pack while Northern Europe has seven of the top ten slots.

Marken says his kid is part of the increasingly connected generation with a "cell phone in hand while listening to on-line music, IMing friends, surfing for class assignments, updating his MySpace, catching the latest on YouTube." And guess what! He has no time for regular TV.

If he wants a “real” show, he knows where the online stuff is at. And according to Online Publishers Association (OPA) he isn’t alone. Arbitron reports that Internet viewing has been increasing steadily in the US from 7% in 2004 to 8% in 2005 and now 12% in 2006. Care to chart the slope of that line?

According to Marken, "IPTV subscribers in Western Europe are projected to be more than 16.7 thousand by 2010 compared to 3,283 thousand this year. In the US, there will be more than 422 million homes with broadband by then. By then, people who watch TV via the Internet will increase from 2.4 million to 63 million."

This brings me back to the discussion a few weeks ago of podcasting versus broadcasting. I talked about how much fun I was having with the podcast, about how website traffic has remained constant, and about some of the advantages of podcasting. I missed one. A listener wrote that the podcasts are better than broadcasts because they have a shelf life. He was listening to a report I'd done a month or so earlier because he wanted to review the information. Try doing that with broadcast radio!

"What worries the controllers," says Marken "is that people who are viewing this stuff aren’t just kids." And that's certainly true of podcasts. Technology Corner was on WTVN Radio for more than 15 years. It's a station with an "older" demographic. I was a bit concerned about converting the show from broadcast to podcast. But I've heard from listeners -- some of whom describe themselves as not very technologically literate -- who have easily made the switch from over-the-air radio to on-demand podcasts. I suspect the same will be true for television.

Nielsen’s research shows that about 13% of Internet TV viewers are in the 12-17 demographic, about 7% are 18-24, just under 20% are 25-34, and (uh-oh!) almost 55% are in the magic 35-64 demo. Advertisers may become apoplectic!

Marken draws a parallel to on-line music. "Just as on-line music created an opportunity for indie musicians, they have found an eager market for music video webcasts. Clubs across the country are installing webcams to entertain the global online market. It is great promotion for the clubs, for the bands, and for music lovers."

"Gig, a club in LA, regularly video records unsigned bands for their showcase. As the online audience grows you’ll be certain merchandising will follow –- music video sales, club and group merchandise, and even download song sales."

There are problems to overcome

The biggest problem, says Marken is just finding the show you want to see. "There are thousands of shows and channels on the Internet now and in a few years there will be like a gazillion IPTV channels around the globe. No one has come up with a good on-line service TV Guide."

Marken's son "sends us cryptic notes saying we should check out such and so," and that's exactly what Kaydee does. Every few days, she'll e-mail (or, more likely, IM) me with a list of must-see videos.

Hollywood television producers are jumping on the bandwagon if only out of defense. But, says Marken, "it is the indies who have the potential and the power to change the control structure (and heck even make some money along the way)."

The other problem is picture quality. It's not very good at the moment, and that's being charitable. But Marken says the quality is both understandable and acceptable "at this stage in the technology’s growth." Change is coming. "Internet video has a huge upside. But it comes with a risk to the content owners cannibalizing their present revenue streams. And for the next few years they will simply try to survive."

Expect content providers to try ad-based (commercial) systems and subscription-based systems. Google and Yahoo are getting ad folks trained in the 1-1 online advertising model. Last year it accounted for about $13 billion or 4.6% of the total media advertising. By 2009 it is projected to be $22.3 billion or 7.5% of the total.

"Sites like MySpace Videos, Yahoo Video Search, MSN Video Search, Google Video Search, AOL Video, and YouTube are already gaining huge audiences. Even lowly Grouper, which Sony just bought, showed a traffic increase of 1,678% in the first six months of the year according to Hitwise.

If you're a content provider and you haven't yet read Chris Andersen’s The Long Tail, you'd better do so. Soon.

What if ... ?

In the early 1960s, a group of kids in my neighborhood had a band. They may have named the band, but I can't remember what the name was. The radio station in town was a "daytime" operation, meaning they had to sign off at sunset. I pretended to work there and station management was crazy enough to give me a key to the building.

One night after the station had signed off, the band and I went to the station. They played. I was the recording engineer. The equipment was primitive, even by early 1960s standards. But the recording we created was good. Maybe not stellar, but good. Good enough that people would have liked it if they could have heard it.

But they couldn't. The Internet didn't exist in the early 1960s, not even in someone's imagination. There were no personal computers. No peer-to-peer networking. Musicians who couldn't get signed by one of the major labels had no chance at all.

That's different today. Musicians can easily create their own CDs and sell them at concerts. For these bands, peer-to-peer file sharing is good because it will bring more people to their concerts. What's good for the indie bands and listeners is bad for the big labels. Just as gigantic dinosaurs were unable to compete with smaller, voracious mammals, the labels will -- in the long run -- lose out to the smaller, aggressive indies.

"And so it goes." (Credit either Linda Ellerbee or Billy Joel.)

OPINION: "Those who cannot learn from history
are doomed to repeat it."

Spanish philosopher, essayist, poet, and novelist George Santayana (1863 to 1952) wrote those words, which are the most quoted words from "The Life of Reason" in his book, Common Sense. That seems to be missing these days at HP -- both reason and common sense. Oh -- and a knowledge of history.

When the Nixon administration tried to eliminate leaks in the early 1970s with its "plumbers unit" that eventually spawned the Watergate mess that brought down the president, the nation should have learned that nobody is above the law. Not the president. Certainly not the chairman of the board of a corporation. We are a society of laws. Those who transgress may do so successfully for a time, but not forever.

Now it appears that the California attorney general may file charges against the (now former) chairman of the board of HP and others. According to the San Jose Mercury News, Attorney General Bill Lockyer says that he believes there is sufficient evidence to indict people both within Hewlett-Packard and outside the company. HP is accused of illegally obtaining the personal phone records of board members and 9 journalists in an investigation of boardroom leaks.

I remember the legendary HP, a company built from the ground up on honesty, fair dealing, and top-notch engineering. Before products were released to the public, they were tested so that the company knew that -- even if customers abused the products -- they would continue to work. The world doesn't care much about that these days. All anyone seems to want is "cheap". That's why stores such as Wall-Mart are so successful and why companies apparently cannot be run the way HP once was.

Reports suggest HP chair Patricia Dunn had knowledge in advance of the illegal actions. Emergency board meetings this week eventually resulted in her resignation. CEO Mark Hurd will take over as chairman when Dunn resigns, but that won't be until January. Between now and then, the investigations will continue -- and not just on the state level. The House Committee on Energy and Commerce asked for documents and could begin hearings.

Odds and ends

I encounter no small number of oddities and anomalies in dealing with computers. Individually, none of these would be worth mentioning. Collectively, though, they're worth a couple of minutes. So I offer for your inspection an update that claims to have been installed before personal computers even existedand an example of what some people will consider Microsoftian pettiness.

An Apple update before Apple existed

Steve Jobs was born in February of 1955, so he would have been just a few months shy of 15 at the end of December 1969. Apple Computer was founded on April 1, 1976, so it didn't exist in December 1969. The Mozilla Firefox browser was released on November 9, 2004, so it didn't exist in December 1969.

I wonder then how Firefox on my Apple computer registered an "update" that was installed on December 31, 1969. Has Apple perfected time travel?

I'm sure Microsoft isn't ever petty about anything

The new version of Internet Explorer includes MSN Search as its default search engine, but users who visit Google's website will be offered the opportunity to switch:

Google's approach would run an executable file that would be interpreted by my anti-hijack software as a security problem. In any event, I prefer to make changes such as this manually. It's easy.

Just click Change Search Defaults and Microsoft will take you to a page that shows a large number of alternate search engines.

All I have to do is spot the Google logo a click it. The only problem is that I don't seem to be able to see Google's logo.

Hmmm. That seems to be because Microsoft "forgot" to include Google's logo. There's a logo for AOL. One for Ask. Lycos is there. And MSN is there. Yahoo. About. Amazon. Best Buy and Target are present.

Wikipedia is there. Shopzilla. MTV and Overstock.

But no Google.

I must point out, also, that Microsoft seems to have omitted the logo for Microsoft, too. That's why I consider the omission more one of absent mindedness than pettiness.

No Wal-Mart, either. And who would want to omit this leading example of American capitalism at its very best!

Nerdly News

Firefox is "more secure"? Don't bet on it!

Mozilla has released an update to Firefox that addresses 7 security flaws, some of which are serious. If you're a Firefox user and you haven't installed the new version, now would be a good time to do so.

Firefox 1.5.0.7 eliminates a flaw that might allow a rogue website to run code on your computer.

Of the 7 vulnerabilities fixed, Mozilla rates 4 as "critical". Patches eliminate known vulnerabilities that would allow websites to circumvent security in several ways -- via an RSA signature forgery flaw and by using cross-site scripting vulnerabilities. It also fixes a problem with JavaScript regular expression heap corruption and a memory corruption issue that opens a security hole

Whether your preferred browser is IE, Firefox, or something else, it's important to make sure that you're always running the latest version -- the one that has addressed all known security problems.

It's the 50th birthday of the hard drive

How many hard drives are in your house? Kaydee's Mac has 2 internal drives. My desktop system has 2 internal drives, 2 external drives, and a network attached storage drive. I also have a notebook computer with a single hard drive.So that's 9 hard drives in the house with a capacity of more than 1 terabyte. Every one of those drives is thousands of times larger than the first hard drive introduced in September of 1956.

IBM released RAMAC (Random Access Method of Accounting and Control) with 50 24-inch platters that stored a couple of megabytes worth of data in a housing the size of a large refrigerator. Today you'll get thousands of time the amount of storage on a single-platter drive that's only an inch wide.

Al Shugart was an IBM field engineer in those days. Eventually he left IBM and founded Seagate Technology, a company that's still around today. Fifty years ago, 5MB of storage weighed a ton. Today 2GB of solid state storage weighs less than an ounce.

By the time the IBM XT computer was released, it was possible to cram 10MB of data into a drive that was less than 6 inches wide and only 4 inches tall. Today's hard drives are as small as an inch wide and less than 1/4 inch tall. The more common 2.5-inch platters can easily store 10 to 80GB of data. If the auto industry had similar accomplishments, today's cars would get more than 60,000 miles per gallon of gas.

Of course, those cars would also crash twice per day. (Old, old joke.)

Annoying legal disclaimer

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