Monthly Archives

November 2006

BTVision and a look at how close we are to tomorrows webTV world

By | Aggregators, BT, IPTV, PCTV | 8 Comments

WebTV 

This week BT announced the launch of BT Vision, their new IPTV service.  There are lots of details on RadioandTelly but in summary you get:

  • A set top box which supports Freeview (UK free to air digital terrestrial TV service)
  • Set top box incorporates PVR which can hold 80 hours programming
  • Electronic programming guide which combines 14 day TV schedule and defined range of downloadable on demand content (sports, films, music etc.)
  • Access to BT Podshow (BT site which has licensed content and some UGC on it, but is v. careful with respect to copyright)

This is a first step towards the future vision I have been talking about, it gets TV’s connected to the internet, but open web access is going to be the killer app.  IMHO that is going to be the thing which motivates people to move.  Huge content libraries are interesting, but I’m not suffering for lack of choice at the moment, the thing I am missing is being able to go looking for stuff that interests me.

Open web access is also the enabler for mass adoption of aggregators and filters like TIOTI.  The likes of TIOTI can get off to a good start with early adopters and people who watch TV on their PC’s, but as pointed out by the Beeb balancing your laptop on your knee can only take you so far.

(As an aside reports on the BBC website are now suggesting that TV piracy is rampant on the web.  And the good news for UK plc is that we have a lead here!  Apparently we account for 10-25% of all TV piracy – not bad for a little island.  And all because we love American soaps.

It is worth noting though that more and more stuff is being made available legally according to Paul Pod of TIOTI.)

Other services available in the UK today (Telewest Teleport, CinemaNow and Homechoice) are all similar in that they only make their pre-defined libraries available.

These services all control the EPG as well – so whilst in theory it wouldn’t be difficult to open up web access to do so they would need to rebuild their user interface – which I understand is a tricky business.

On the subject of interfaces – I learnt of a new company today, Miniweb who are building a standards play around managing the internet-set top box-TV connection and user interface.  Seems interesting, but you know my thoughts on set top boxes – no more use than a chocolate teapot in a true webTV world.

Another important enabler that is having an impact today is the combination of improving compression codecs and improving bandwidth.

As I come to the end of this (rambling) post I realise I have been thinking about this back to front.  We won’t suddenly switch to open webTV because someone like BT makes it available in easy pre-packaged form.  It will start from the bottom up – like Napster created iTunes.  So the interesting data to look for is TV shows downloaded from the web.

Library House mediatech 2.006

By | Blogging, Entrepreneurs, IPTV, Library House, Networking, Open Source, Venture Capital | 2 Comments

 Library House logo   Conference logo

I want to thank the folks at LibraryHouse for putting on a great conference today.  The things I liked about it were, in no particular order:

  • It was buzzy – London feels like a good place to be an entrepreneur right now and events like this are an important part of the mix
  • Bob Young – founder of Red Hat and now Lulu – how could you not like him?  And I love Lulu.  There has been a lot of talk recently about where we are in the cycle and whether we are in a second bubble – are we at 1996-97 or is it more like 1999 people ask.  Bob’s analogy was with the PC industry and by his reckoning we are in 1984 – pre Compaq and Dell.  I’m not sure exactly what that means but it sounds like he thinks we have a good while to go yet – which is good for me.
  • I always like to hear Russell Buckley of Admob for the shear scale of what they are doing – in the last day they have passed over 500m Ad views.
  • Michael Bayler of Digital Rights Marketing Company – he influenced my thinking more than anyone else today.  I have a lot of great notes and picking a highlight is tough but picking one quote it is (roughly) “The new choke hold for media consumption is the consumers head…..so…..media is about competing for consumer attention“.  The implications of this go far and wide, and are something I will come back to in a later post. 
  • Company presentations from TIOTI, Miniweb

This was also my first outing as a “blogger”.  I was part of the experimental “meet the bloggers concept” and I’ve gotta say I enjoyed myself today.  Met a lot of good people, many of whom I knew already, and some new.  And nearly everyone knew the blog (a couple of you were even kind enough to pretend you liked it…).  Really good day.  I was caught a bit short at the end though, when I was packing up to go home and then suddenly found myself on stage for an impromptu wrap up panel!

More on the future of TV

By | Aggregators, IPTV, PCTV, TV, Web2.0 | 11 Comments

The kernel for this piece was this presentation from Bear Stearns by Spencer Wang on the future of the entertainment industry I found on Raphael‘s (Leafar) and Nick Carr‘s blogs.

The presentation uses value chains as a framework to analyse TV and chimes well with a lot of what I wrote in Internet TV the end of the world as we know it, internet TV and the future of set top boxes, and why internet tv will mean the end for channels.

My central theme has been that it is difficult to underestimate how disruptive the internet will be to the TV industry

This diagram from Spencer’s presentation sets out the current value chain for TV with the future players boxed underneath.

 TV value chain 4

In my earlier posts I have been talking about content packaging and distribution. 

In distribution it is easy to see the internet emerging dominant and the existing players only surviving to the extent they become ISPs.  Set-top boxes as we know them are mostly about signal transcoding, and EPGs – all that will happen in the PC, as will local storage.

Moving to content packaging, one of Spencer’s key conclusions is that we can:

Expect New Viable Aggregators to Emerge

Channels as we know them are aggregators designed for a limited distribution world.  These new aggregators will be filters and recommendation engines – not a list of 24 hours worth of programmes for each day of the week.  Spencer suggests that the well known internet brands might dominate – my gut is that today’s start-ups have a good chance.  (Or a good chance of selling out to these players at big prices 🙂 .)

Spencer also takes the argument further.  He points out that the barriers to entry for producing content are falling.  Camcorders have sufficient quality and video editing software is cheap and runs on your home PC.  This will disrupt the TV production industry – they will lose market share to user generated content and low budget professionals and might find themselves very unprofitable unless they cut costs and enable themselves to sell programming more cheaply than they do today.  If they don’t do this the new aggregators and filters will find better value alternatives for us.

The good news for the industry is that lower prices and more choice will likely increase overall demand.

Next I hope to look at the IPTV offerings available today from BT and others to see if the future is visible in today’s services.

Our investment in WAYN

By | Entrepreneurs, New Media, Social networks, Venture Capital, Web2.0 | 10 Comments

WAYN logo jpg

As you have probably heard we recently led an $11m round in travel oriented social network WAYN.

I wasn’t able to scoop the Sunday Times exclusive with the news so I’m taking the opposite approach and reporting on all the coverage after the dust has settled.  Maybe this time next year I’ll have the break on the established press….

The news has been covered in The Sunday Times (thanks for the lack of DRM), by Fred Destin, Brad Feld, Kris Nair, Red Herring and Alarm Clock Euro.  Thanks everyone.

WAYN is a site where people with a common interest in travel network with one another, both while they are travelling and back at home.  It has 7m registered members and is growing at around 500,000 per month.  The UK is the biggest geography, but over half the members are from other countries.

Some of the things I really like about WAYN and our deal are:

  • It is a great site, very easy to use and navigate
  • It has fantastic momentum
  • They have a successful subscription based revenue model and are profitable
  • There is a solid international base
  • Fantastic syndicate of angels and board directors/advisors with internet travel pedigree

For sure there is still a long way to go – we have made a venture investment, but the base is very solid.  I also like it that the stuff that needs to be done is an extension of what has been done already (work the new feature list to innovate like crazy, tweak the site to improve conversions, build on the US base, upgrade the IT infrastructure) – I don’t underestimate the challenge, but I take comfort from the fact that we don’t need to take any steps into the unknown.  The toughest nut to crack will be getting the US going on a par with the UK.  It has been pointed out that Americans travel less than Europeans – that is true of international travel, but travel within the US is still travel, so we are hopeful this challenge is manageable. 

The subscription model is interesting.  The trick has been putting enough into the free offering to drive growth in registrations and having a distinct offering with clear extra value for premium subscribers.  Simply offering extra storage or allowing 10 photos instead of five doesn’t cut it.   Some of the advantages of having a premium account include preferential positioning on search results, access to extra communication features and search tools (e.g. so you can find someone from San Francisco, who is also French, is aged 31-40 and has been to London, and interact with them).  Going forward they are looking to introduce a number of exclusive travel and lifestyle benefits for paying subscribers, so watch this space…

Mobile advertising getting overfunded???

By | Advertising, Mobile, Venture Capital | 6 Comments

Mobile advertising

There are a lot of start-ups in the mobile advertising space.  The following list is of European players I could remember or find with a quick search.  I’m sure I’ve missed some.

  • YOC – raised Euro10m on Frankfurt stock exchange – market cap 33m
  • Admob raised $5m (I believe) from Sequoia and are active in Europe
  • Screen Tonic raised Euro5.5m from 3i and iSource
  • FlyTxt raised $2m
  • Actionality raised estimated Euro2-4m from Doughty Hanson (website down at time of writing)
  • TXT4 raised Pound1.25m from Oxford Capital Partners and Noble
  • ActiveMediaTech

Plus Google and Yahoo! are in the mix and you can bet MSFT aren’t far behind. Google and Yahoo! race to cut PPC deals with mobile operators.

All this activity is happening because it is a market that is very obviously going to be very big at some point.  The problem is that it is unclear when.

This survey report on e-consultancy shows both the current state of mobile internet (poor) and it’s potential (high).  I am a beliver in mobile, a big one, and people are clearly using their mobiles more and more to access the web, but as the survey report says, the experience is still clunky and is a long way from going mainstream.   

Needless to say, mobille advertising needs to follow mobile internet usage, not lead it. 

3g.co.uk reports a Visongain study estimating the mobile marketing and advertising market at $255m in 2005 rising to $1bn by 2009.  I guess that a lot of the $255m in 2005 was SMS direct marketing style campaigns.  These have been good business for FlyTXT, ActiveMediaTech and others but are very hard to scale.  The true mobile advertising market is probably much smaller.

There are encouraging signs of market development though, according to Admob’s home page they have served nearly 500m ads now and Screen Tonic have done some good things on the mobile operator decks here in Europe, but this is a really early market.  The models are still developing in almost every respect – when and how to show display ads, how search based ads will work on mobile (it is still unclear how search will work), what rev share models will work, and how consumers will react.  As the 3g.co.uk article says, 2006 will be a year of experimentation.

It is my feeling that CPMs for new advertising technologies start high driven by limited initial inventory and the fact that small scale experiments don’t cost much and then drop off as genuine inventory builds and advertisers learn what a channel is worth.  I am hearing a lot of talk about high CPMs in mobile.

My fear is that the sector could get overfunded, destroying equity returns for (nearly) all participants.  This happened with mobile games and the same dynamics are at play here (huge market, obviously coming, timing unclear).  We haven’t reached that stage yet though, as the VC investments to date have been relatively modest.

London VC blogger meet-up

By | Blogging, Venture Capital | 10 Comments

Blogger meet up 

I’m joining Fred and Shantanu in reporting that last Thursday night five of the six London based VC bloggers met in Bar Nobu for a few drinks.  The full list was:

  • Paul Fisher of First Capital with his Coffee Shops of Mayfair blog
  • Fred Destin of Atlas who blogs under his own name
  • Jason Ball of London Seed Capital who blogs as Techbytes and was the energy behind the evening
  • Shantanu Bhagwat of Amadeus who blogs as Global-Themes
  • Me, and
  • Max Bleyleben of Kennet who blogs as Technofile Europe didn’t make it (Max was overseeing the birth of his second child, surely the only place better to be than our little geek soiree!?!)

It was a good evening with the usual VC gossip with a good helping of blog talk thrown in. 

The main thing I learnt though was that I’m a luddite compared with the other guys! – still using the WordPress online editor to write posts doesn’t seem to be where it is at.  I’ve gotta say that for me it is OK, certainly not bad enough to make me want to spend time learning a new tool.

What I will do is put a Google site search box on my home page to replace the broken Technorati search, and I will get round to updating the template to have two sidebars…. Plus, I’ve heard what you are saying guys and I will change that picture.

‘Discovery’ augments ‘Search’

By | IPTV, New Media, PCTV, Social networks, TV, Web2.0 | 4 Comments

Reading this post on Leafar left me thinking that there is more to say on recommendation than I managed in this post on TV Channels.

The point I missed was this:

Recomendation engines can help you find wonderful new content

In the old world this is quite labour intensive you rely on friends and newspapers, and it is hard to quickly sample lots of suggestions. 

Pandora/Last.fm do this in music.  Netflix/Lovefilm (in our portfolio) do this for DVDs and movies.  Stumbleupon does this for websites.  U.lik is playing in this space.  Thinking about it, taking the idea beyond media TrustedPlaces could do this for bars and restaurants.  Amazon has been doing it for a long time with books.

Channels do a bit of this, but bringing a service like the above to internet TV would be much better.

Taking it further, all these companies have (or are building) proprietary databases of preferences – combining those somehow so that my book buying behaviour and listening habits can be fed into my TV viewing recommendations would be awesomely powerful.  Disclosure – this was originally Andy Burke’s idea – I put it here in the hope that someone will do it!

Distribution Distribution Distribution

By | Entrepreneurs, Social networks, Venture Capital, Web2.0 | One Comment

I owe this little nugget to Reid Hoffman best known as founder of LinkedIn.

He was on the panel at a Silicon Valley comes to Oxford event at Oxford’s Said Business School on Monday night.  (As an aside it was a good night and I think events like this one help persuade people to become entrepreneurs, which is great for UK plc.)

Reid was talking about web2.0 and said

In retail the received wisdom has always been that the three most important things to your business are location, location, location.  In web2.0 it is distribution, distribution, distribution.

So true.

It works for raising money too.  In the same way as it would be tough to raise money for a new shop concept without having found a location so it is hard for a web business without distribution.

I have talked a lot about traffic on this blog.  This hits to the same point but in a more actionable fashion.

 

Why internet TV will mean the end for channels

By | Advertising, IPTV, New Media, PCTV | 11 Comments

TV 

This is a second follow up post to Internet TV – the end of the world as we know it.  In the original post I argued that the internet might be more disruptive to TV than people realised, in the first follow up post I gave more detail on why IMHO there is no future for set top boxes.  This one explains in more detail why I think TV channels as we know them will also disappear.

This area is a little less clear cut than set top boxes – so what I say here is more provisional.  I should also thank Tony Hart of PacketVision who has helped me in my thinking.

My starting point is the Long Tail argument that channels only came into existence because distribution has been the limited resource.  When TV started and there was only one signal the choice was to either broadcast the same programme over and over or broadcast a schedule of different programmes – hence the TV channel was born.

In a future world where we receive our TV via the internet there will be no limits to distribution so the need for channels disappears.

There are plenty of things that exist in the world even though there is no need for them.  The reason I think channels will disappear is that they bring several disadvantages:

  1. They tie you to a schedule – so called ‘appointment TV’.  If you want to watch a programme you need to be there when it is on, or invest in a system that allows you to time-shift.
  2. Channels are arbitrary bundles which end up being more expensive than they should be at – £50 a month my Sky subscription feels like it is more than I would pay for the individual shows I watch
  3. Channels need to appeal to large populations making it impossible for individuals to get customised experiences.
  4. They create an extra layer which complicates the process of finding the programmes you want and is wasteful.  You need to know what channel your programme is on then scan the listings to find when it is showing.  Channels need to market themselves as well as their programmes – this adds no value.

In place of channels people will go to websites where they can view their favourite shows directly.  To watch Lost you would go to the Lost site and simply start watching a stream.  You find the website via search, via someone sending you a link, or maybe by typing in a URL if you have seen an ad for the show.  You will either pay to watch or suffer some ads in the stream.

Getting the interface right so the non-technical find it easy and the TV can be controlled from the sofa in ‘sit back’ mode is critical to this.  If we are talking about downloading programmes then digital rights management issues will need to be solved.  This may not be a problem with streamed content???

Channels have one huge advantage – they make decisions for people about what they are going to watch.  Not for me.  I can’t remember the last time I watched something that wasn’t saved on my Sky+, but a lot of people turn the TV on and watch what is there.  Related is the fact that in some houses the TV is permanently on, in the background. 

I think this will change.  Channels are a blunt instrument for suggesting which programmes you might like to watch.  Better would be a combination of preference engines, collaborative filters and recommended lists from people you trust.  So I might turn on my TV and see that my collaborative filter suggests I watch highlights from the Ryder Cup that my golfing buddy also watched, or maybe recommended, alternatively I might feel like a film and check out a list that Johnny Vaughan is recommending.  A preference engine that I pre-programmed on my PC would make these options easily available on my TV via a traditional remote control.

Taking this scenario to the next level, celebrities like Judy and Richard might recommend an entire day’s worth of programmes and organise an interface that allowed you to start a 24 hour stream with a single click.

This gives all the benefits of a channel, but is different.  What I am describing here is a TV recommendation service that you might subscribe to.  One option might be a 24*7 stream that looks like today’s channels, but that would only be one option.

The reason I am a little equivocal with this prediction is that I’m talking about a big change in behaviour, which is a dangerous game.

 

 

Some thoughts on networking

By | Blogging, Networking, Social networks, Venture Capital | 6 Comments

Power networking 

As a VC networking is a large part of what I do, and a couple of things have got me thinking recently.

  • Firstly this blog has already had a big impact on my network. 
  • Secondly I read Christian Mayaud’s posts on high performance networking – a bit long, but worth reading if networking is core to what you do, and if you are a VC or entrepreneur then it probably is.
  • Thirdly I noticed a recurring pattern in the behaviour of power networkers.  When I first met them there would be a flurry of activity which stretched beyond the reason we had met, and then things would go quiet (at least for a while).

Christian’s analysis breaks down our networks into three parts – our potential network, our current network and our former network.  He describes the natural flow from potential, through current to former and how people in former become current again when the need arises.  He also says that there is a natural limit to the size of a person’s current network, even if they really work it – 150-300 people.  This makes great sense to me, I struggle to keep up with my old friends, let alone all the new ones I make.

Because the size of the current network is limited, I think this means that having a good network is all about having a big former network.  The power networkers who come into your life with a flurry of activity and then go relatively quiet understand this intuitively.  They are cycling people through their current networks to their former ones.  Crucially, they quickly build the relationship to critical mass so there is enough substance to it that when the relationship moves to the former network it is strong enough that it can be reactivated.

This blog reaches out into my potential network and forms weak relationships with lots of people, but doesn’t bring them into my current (or former) network.  It takes physical meetings, (or a lot of online interaction) to change that, and as Alan Patrick points out beer can help!

There is an important general point here about the limitations of online interaction – my gut says it generally needs to be underpinned at some stage, somehow with real physical activity.  I need to think some more about this.