An Ignoble Experiment

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How accessible is online video to the hearing-impaired and those who speak other languages? Thanks to developing technologies, it's getting better all the time--something we explore in today's feature on closed captioning. We take a look at some of today's closed captioning providers, including startups challenging the captioning status quo.

In the early 1970s, when Boston-based public broadcaster WGBH introduced open captions on its popular program The French Chef, the importance of providing descriptive text below the video image was made clear. The FCC in 1976 set aside a section of the broadcast signal, line 21, for closed captions and standards were developed, but it wasn't until passage of the Television Decoder Circuitry Act of 1990--along with the Americans with Disabilities Act--that closed captions became a requirement.

That 18-year gap, between captioning's implementation and regulation, is an unthinkable time span today. The growth of over-the-top technologies in the past five years alone has been massive, and older technologies are struggling to keep up with consumer demand.

But being able to access online technologies is a critical issue at the FCC, which in 2012 mandated that previously-aired television programs and movies needed to be captioned for online video viewers, as well. The commission gave OTT providers like Netflix (NASDAQ: NFLX) and Amazon (NASDAQ: AMZN) just two years to be in compliance with the new rules.

While bringing online video into compliance has been a bit of a scramble, it's also created new opportunities, both for new entrants to the captioning and subtitling market, and for new business uses of digital captioning files.

Closed captioning for online video is potentially a gold mine for data analytics, something discussed in today's feature. While privacy concerns and other issues may limit the metadata companies can gather from the use of captioning files by OTT viewers, continued development in the ways that closed captions can be created is driving a bank of new ideas. Check out our new feature here.--Sam

Webinars

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> Don't Miss this FierceWireless 5G Breakfast at Super Mobility Week! - September 9, 2014 - Las Vegas, NV - Sponsored by Ericsson, Intel, Nokia, and SOLiD
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Marketplace

> Whitepaper: Next-generation OSS is critical to delivering service agility in new virtualized networks
> Whitepaper: Stop Selling Inventory and Start Selling Your Audience
> Whitepaper: VoLTE - Using Policy to Deliver High Definition Voice Services
> eBook: eBrief | Connected TV Advertising's Growing Potential
> Whitepaper: Next Generation Technical Support
> Whitepaper: Cloud RAN
> Whitepaper: Realizing Open Flow Switches with Aricent Frameworks
> Whitepaper: Increasing LTE Revenues: Top 10 Innovations and Operator Examples

Jobs

> DAS DESIGN ENGINEERING MANAGER - Atlanta, GA. and Newport Beach, CA.
> Lead Engineer - Converged Technologies - Monroe, LA
> Director, Consumer Products and Operations - Ridgeland, MS (US - 39157)
> Senior Engineer - System Automation - Monroe, LA
> Director, DAS Venue Development) - San Francisco, CA. / Bay Area
> Jr. Accounant w/Project Set-Up Experience - Fairfax, VA (US)
> Sr Network Administrator with TS/SCI - Bethesda, MD (US)
> Senior Information Security Analyst TS.SCI Required - Jackson, SC (US)
> Principal Confirguration Analyst - Warrenton, VA (US)
> Sr Analyst, Telecom - Knoxville, TN (US)

This week's sponsor is Anritsu.

eBook | LTE Advanced Status Report

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Today's Top Stories

1. HBO ahead on profits for now, but Netflix is better positioned, analyst says

By Samantha Bookman

Comment |

Netflix (NASDAQ: NFLX) finally got one up on HBO in subscriber revenue last quarter, edging past with $1.146 billion versus HBO's $1.141 billion, but that may not be a one-time thing: Netflix is much better positioned for success, both in the U.S. and worldwide.

That's the determination of nScreenMedia analyst Colin Dixon, who compared the two companies in five distinct areas: customer data, client reach, catalog depth, price and international strategy.

Netflix's client reach and ability to mine customer data more deeply are two big advantages. For example, while HBO Go is increasingly available on mobile devices, consoles and streaming devices, Netflix is already there--available on almost every device out there. Further, HBO is currently dependent on Nielsen's viewer measurement, which means that while the network has far more subscribers--114 million globally--it doesn't have the deeper access to client data that Netflix does from its 50 million-plus subscribers worldwide.

HBO is hobbled by its pricing scheme as well. "HBO now costs $19-$20 on many pay-TV systems. It also comes encumbered with the need for a $60-$70 pay-TV subscription," Dixon wrote in a blog post. "Though operators are introducing cost-efficient bundles of broadband plus basic TV plus HBO, in the Internet age being tied to a bundle at all is a disadvantage."

Internationally, Dixon pointed out, Netflix is also jumping ahead. While HBO Nordic has a penetration of 4 percent, Netflix's penetration in Denmark is 29 percent. Furthermore, good quality broadband is key to Netflix's expansion decisions: "Where it finds those conditions it has proven a master of execution," Dixon said.

So, despite Netflix CEO Reed Hastings' gentle tweak of HBO in a Facebook post last week, it's not far-fetched to see the SVOD service surpassing HBO's pay-TV-centric service in several more earnings segments.

For more:
- nScreenMedia has this post

2. M&E executives say it's time to grow: report

By Samantha Bookman

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Chief financial officers at major media and entertainment companies like Disney, Liberty Media, Microsoft (NASDAQ: MSFT) and Time Warner are downplaying economic uncertainty and are setting themselves into the starting blocks for new growth. The focus this time: digital, an Ernst & Young report says.

CFOs of media & entertainment giants are looking to expand, mostly in their existing/core markets. (Source: Ernst & Young)

With digital media platforms--not just for online video but gaming, music, film and reading--growing at an estimated 17 percent CAGR (compound annual growth rate) between 2010 and 2017, and data consumption (25 percent) surpassing device penetration (20 percent), CFOs are setting their priorities accordingly.

"Internally, most media and entertainment companies (64%) are expanding digital staff faster than digital revenue is growing," a MediaPost story noted.

Further, 59 percent of film and 58 percent of broadcast executives said they are investing in digital staff faster than digital revenue is growing.

And, perhaps most important, CFOs are keen to get insights on their customers through better data analytics. Only 33 percent of respondents said their companies are doing a good job of using data to generate new business. But 52 percent of CFOs say their companies are good at using data to determine production rights and content investments.

Ernst & Young interviewed 50 CFOs in 10 geographies, spanning eight M&E subsectors. Most companies in the study reported more than $1 billion in annual sales. Slightly more than half of the companies are U.S. based. Respondents were kept anonymous in the report.

So, how will M&E companies grow? Most CFOs aren't interested in throwing money to the wind: 72 percent said they are focused on existing or core markets. Some 67 percent are looking for "bolt-on" deals that will help them expand geographically in existing businesses--look at Telstra's pending acquisition of online video management provider Ooyala, or thePlatform's strategic alliance with Verizon Digital Media Services, deals that give the smaller companies a global boost.

Still, 50 percent said they are also looking to invest in new business, while 64 percent are eyeing emerging markets, too.

Either way, the increasing valuation of both M&E companies and digital providers makes it an anything-goes game.

Higher-valued companies need to "more aggressively pursue acquisitions in the future--which they need to do as both an offensive and defensive strategy," said Farokh Balsara, Ernst & Young media and entertainment sector leader. "Companies need to expand to grow. If they don't, they could become targets."

For more:
- see the report
- MediaPost has this story

Read more about: media and entertainment
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3. Ooyala acquired by Telstra, setting stage for global growth

By Samantha Bookman

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Streaming video distribution provider Ooyala has been acquired by Australian telecom Telstra for an undisclosed amount. The company will operate as a wholly owned subsidiary, with its management and executive team remaining at its Silicon Valley headquarters.

Telstra already owned 23 percent of Ooyala from a previous investment round in which the carrier put in $61 million. To raise its stake to 98 percent and set the stage for the acquisition, Telstra's ownership paid an additional $270 million. The purchase will close in about 60 days, according to a press release.

The investment is also the first for Telstra's GAP (Global Applications and Platforms) strategy, which is designed to invest in "long-term global growth in markets that are adjacent to Telstra's core business, where software disrupts traditional business models," according to the press release.

For the moment, things are business as usual at Ooyala, which will continue to serve its existing customers, including cable networks like Univision, Comedy Central and ESPN, as well as movie studios and other clients needing online video distribution services.

Jumping under Telstra's umbrella will give Ooyala a better position to work from, a TechCrunch article pointed out.

"Having the security of operating as a wholly owned subsidiary could shield Ooyala from dealing with the public markets, while serving a growing customer base," according to the article, which noted that its competitor, Brightcove, has struggled since going public two years ago.

Most importantly, Ooyala can chase down global business and scale to meet demand thanks to Telstra's backing, while Telstra can grow beyond its core telecom business into the expanding online video segment.

"With today's news, we combine the backing of one of the strongest telecommunications companies in the world with the intensity and agility of an independent Silicon Valley company," said Ooyala CEO Jay Fulcher in a prepared statement. "This combination accelerates our growth and pace of innovation, while we remain laser-focused on helping media companies everywhere win in an industry undergoing massive transformation."

Staying on the move is critically important for Ooyala as other online video distributors shift to a global strategy. In July, thePlatform formed a strategic alliance with Verizon Digital Media Services to provide its video management services over VDMS' multinational content delivery network.

For more:
- see the release
- TechCrunch has this story

4. 4SeTV turns to Kickstarter as it looks to fill a TV Everywhere niche

By Samantha Bookman

Comment |

As the tug of war for subscribers between cable operators and OTT providers continues, and with TV Everywhere still in its infancy in the U.S., startups are continuing to find niches that attempt to meet demand for anywhere, anytime video service. Case in point: 4SeTV, a startup looking directly to its target audience for its next round of funding.

4SeTV's Kickstarter page is being prepped for launch on Aug. 19.

4SeTV will launch a Kickstarter campaign on Aug. 19, with the goal of raising $50,000 to complete and launch its four-screen mosaic device.

Consumers viewing over-the-air broadcast can attach their antenna to 4SeTV's device, which then decodes the digital stream and re-encodes it, enabling viewers to watch up to four channels at once in a mosaic-type screen on their television set, smartphone or tablet.

While $50,000 is a "bare minimum" for the cost of launching the product, 4SeTV founder Hyung Lim explained that he wanted to create a campaign with an achievable goal. "(Kickstarter) has lots of different products out there. To be visible you have to have clear, reachable goals," he told FierceOnlineVideo.

Benefits to Kickstarter donors will range from T-shirts to discounted devices. The largest donations, $2,000 or more, will receive a device plus lunch or dinner with Lim.

The startup's main target audience is sports fans, Lim said. "They are the ones who feel the pain," he said. But the multi-view format could be attractive to anyone trying to catch up to multiple TV shows airing at the same time. For example, he pointed out that while his wife doesn't care about sports, she likes to keep up with shows like The Bachelor in order to chat about it with friends either at work or on social media. "Now she can split the screen on the big screen or the iPad."

Users can shift the mosaic from their mobile device's screen to their supported smart TV's screen, or use Chromecast's cast feature on unsupported TVs.

While mosaics have been available from manufacturers like ActiveVideo for some time, there are no consumer-end devices on the market that offer four-screen capability, Lim said. The cost of the chipset has, in the past, been prohibitive--something Lim said he's worked on resolving with an exclusive development deal.

The device isn't likely to be in danger from broadcasters, since its use falls within the boundaries of copyright law.

The company plans to start shipping units in November, with larger quantities available in December. Multichannel News put the initial price tag at $180. (By contrast, TiVo's Roamio DVR with streaming capability retails at about $199.)

"It's a great way to introduce a brand new product and let people see what we are making," Lim said.

It's not necessarily a pie-in-the-sky vision for Lim. 4SeTV (short for Four Screen enhanced TV) already received an undisclosed amount in seed funding from Digital Multimedia Technology (DMT), a South Korean set-top maker. Lim had already proposed a similar device for DMT to sell to its customers--mostly cable and satellite operators in South Korea. But he sees the U.S. market as ripe for the opportunity as well.

"I convinced them that we could do this thing as a U.S. startup and an independent company by getting additional funding from DMT."

DMT's funding took 4SeTV through its development process for the past several months. The company showed off its initial product at CableLabs last week, getting feedback from cable industry players.

4SeTV's business strategy looks similar to the tack that TiVo took with its DVRs: first retail, then entering channel partnerships and, finally, building strategic relationships with cable operators. "Definitely we will engage in OEM business. Whether it's a standalone box doing exactly what I'm doing, or as part of a bigger box," Lim said.

But for now, the consumer is 4SeTV's target.

"We're taking it one step at a time. (First) Kickstarter, to get it to a successful retail market (position). Then with a successful customer base I can talk to operators like Comcast." Should cable operators sign on, Lim says, his company can add more functionality to the device to add value for their subscribers.

And while both TiVo and Roku could be competitors in some degree to 4SeTV, Lim welcomes the challenge. "I think it's a big market and if there's competition, we'll see who does better."

For more:
- Multichannel News has this story
- preview the 4SeTV app

Read more about: 4SeTV, TV everywhere
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5. NFL on track for live OTT streaming? Not yet

By Samantha Bookman

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