Jeff Richards' Demand Insights

For those looking for data points suggesting a rapidly growing market for online video - beyond UGC - I'd recommend reading a new report from media research house Parks Associates. The report, titled "Broadband Video: A Market Update," provides some very interesting data points as well as insights as to a) what is working (hint: complimentary services like BBC's iPlayer) and b) what the hurdles are to mass adoption. Read the rest of this entry for some of the points I found most interesting in the report (and visit the site and download the free report).

1) 19% of US households with broadband are paying for video content - roughly 12 million households, up from 3 million a year ago. Pretty impressive. A lot of this is iTunes, but the advent of new services from major broadcasters and studios is starting to drive the numbers as well.

2) Two rising profit centers from the last 5 years - DVD sales and rentals - are experiencing a significant slowdown in growth (see chart below). DVD rentals and sales grew by 240% between 2001 and 2004, but have now settled in to flat (sales) or 10% annual growth (rentals). Parks doesn't point to any one cause for this, but does point out that more people are watching content On Demand (via their cable provider, for example) and using DVR's to record programming (an estimated 11% of US households now have DVR's).

3) The Parks report notes that "Broadcast networks are reporting early success for their online offerings," including a strong argument that the "catch up" model will be a hit with consumers (among other strong data points, the report cites data from NBCU that says 78% of online users are catching up, vs using the web as a replacement for traditional tv).

There is a lot more in the report worth reading - the last several pages highlight "Key Takeaways" which are pretty insightful. Go to the Parks Associates web site and get the report.

Posted by Jeff Richards at 10:23 AM | Permalink | Comments (0)

A couple of significant events have occurred over the past few weeks which should provide reassurance - to those who keep asking the question "What's the future of digital media?" - that we are in fact witnessing a massive industry shift in the way media is distributed and consumed. A few that are particularly noteworthy:

1) Echostar buys SlingMedia. This is a big deal. It a) is tremendous validation for the media "any time, any where" concept that many of us in the industry have been talking about for some time, and b) it cuts right across the traditional lines of distribution and economics in the media industry. As pointed out by Arik Hesseldahl at BusinessWeek, the acquisition also ups the ante on placeshifting - the practice of watching or listening to live, recorded or stored media on a remote device via the internet or over a data network (see the expanded version of this definition on Wikipedia - it's good). Just as DVR's let consumers timeshift their content - watch it outside the timeframe it was broadcast - placeshifting goes against some of the basic traditional "rules of the game" in the media and broadcast worlds (rights to televise sporting events, for example, are typically sold to different players based on geography, for example). This acquisition puts Echostar, one of the "traditional" players in the broadcast/operator equation, squarely in the middle of the debate over rights and portability of media. That's a big deal. It's also a huge endorsement of a new, network-based technology for media consumption, and that's a big deal.

2) NBC announces NBC Direct. Given the BBC iPlayer's success, as well as the success of offerings from Channel4 and SkyAnytime in the UK, we certainly expected US broadcasters to offer premium content via comprehensive download services. Along with the launch of Hulu and ABC making shows available via ABC.com, we are watching the migration of mainstream broadcast television and movies to an online world. Before we know it, mainstream consumers will have their pc's connected to their tv across the country and the online medium will be as popular as cable and satellite video delivery. As this happens, consumers will see all sorts of new features and functionality enabled around the way they consume media - think of when you started surfing the web for news, rather than reading the newspaper. This is a big deal.

3) NBC.com to premiere original production. As I first read on Cory Bergman's Lost Remote blog, NBC will debut Coastal Dreams, an original production for its online medium. Why is this a big deal? It takes time, money and effort to produce, promote and distribute professional media across any medium. The launch of this program means two things to me:

a) It won't be long before we have the "onlines" - people (likely to start with a demo under 30) who get their media primarily online - and "offlines" - people who get their media primarily offline. And some portion of what is available to the two groups will be different. The onlines will eventually have a ridiculously wide slate of programming available - complete historical libraries, searchable by subject or any other terminology, user generated and amateur content, etc. The offlines will no doubt benefit from the breakthroughs happening online - things like EPG's (for a cool example of this, see the user nav demos on OpenTV's web site) for mainstream cable and dish tv will improve - but they probably won't see as wide a slate or "participate" in the social networking aspects of what is happening with online media.

b) There is money to be made, and an audience to reach, via online content. Sounds basic, but if everyone believed it were true, we'd be further along on this front.

None of these recent announcements is going to change history forever, but as you start to piece together items from across the industry, you have to see the writing on the wall - online video - beyond UGC - is going to be a big deal.

The "any time, any where, any device" era is just around the corner...

Posted by Jeff Richards at 9:12 AM | Permalink | Comments (0)

Online publication PC Advisor reported the results of a recent reader survey which show the BBC's iPlayer (yes, it runs on the VeriSign Kontiki platform) is as popular with readers as Apple's iTunes. Congratulations BBC - quite an accomplishment for a beta launch!

"When asked to name the best online TV download service in the UK, nearly 37 percent of respondents chose BBC iPlayer. This just beat off the challenge of Apple's iTunes store, which 36.2 percent of respondents voted as their favourite." - From PC Advisor, Sept 10th, 2007

Posted by Jeff Richards at 12:13 AM | Permalink | Comments (0)

It's been just over a year since we launched the Demand Insights blog. It's been a lot of fun, a great outlet for me to comment on the happenings in the Digital Content space, and a truly collaborative effort with VeriSign folks like Karen Snyder (Thank You!) who make it happen.

Looking back over the past year, a few stats (current as of August, and rounded) I thought were interesting:

1) Visitor stats. The site gets 79,000 hits and 56,000 page views from 2,700 unique visitors each month. There are also roughly 500 subscribers to the RSS feed (click on the "RSS" button on the right side of the page), which is cool.

2) Links. Links from a search engine comprise less than 10% of visitors; of those links more than 90% are from Google.

3) Most visited posts. The three most visited posts over the past year are 1) my post on Robert Scoble's comments ("Netflix is Dead") on our January announcement of VeriSign's relationship with Adobe to focus on the Digital Media space, 2) my post "Who's Posting on Wikipedia?" about Virgil Griffith's app WikiScanner and 3) my post covering BitTorrent's February announcement that the company would offer a legitimate P2P platform for media distribution. It doesn't surprise me that these are at the top - Scoble is one of the most widely read bloggers, Wikipedia gets 40 million visitors per month, and BitTorrent is a hot topic (both pro and con) in the digital media space.

4) My posts. I'm averaging 6-8 posts per month. Not exactly prolific, but I figure the average post takes me about 20-30 minutes to write (including finding the images, links, etc.). When I visit the sites of guys like Brad Feld, I feel like I'm not even scratching the surface. (I do have 2 kids and a full time job at VeriSign, so perhaps my prioriites are in order after all...).

5) Spam in the blogosphere is ridiculous. I get anywhere from 20-30 spam items in the Comments field each day (one of the reasons you don't see a lot of comments on the blog - it takes a long time to go through all of them and look for real comments - sorry). The topics are often hilarious, and they seem to come in waves. For most of the past year, the majority have been links to sites selling Viagra, Cialis and porn. This summer I had a wave of links to sites selling Adidas shoes (huh?). Now, I'm getting a lot of links promoting music sites. I can't publish most of the comments, but needless to say many are hilarious.

6) Books. I've put up 17 "Recently Read" posts over the past 12 months, which I believe includes everything I've completed (there were a few duds I gave up on early). Not bad considering my primary reading time is while traveling (my two girls - ages 2 and 1 - consume most of my time at home). My favorites remain In An Uncertain World, The Search and House of Mondavi.

7) The name. Why "Demand Insights?" Let's just say it had to go through a corporate marketing review and that's what was decided upon - it refers to the concept of consumer demand. Not exactly at the forefront of digital media terminology, but we've stuck with it for lack of a better name (if you have one, post a Comment).

8) VeriSign Stock. During the past year, VeriSign's stock price has appreciated 52%. Correlation? Hmmmm... (YES - I'M KIDDING)

Looking back, it's been a lot of fun, and I look forward to the next 12 months. Who knows where it will lead...

Posted by Jeff Richards at 2:22 PM | Permalink | Comments (0)

While on vacation this week I read Alan Deutschman's "A Tale of Two Valleys: Wine Wealth, and the Battle for the Good Life in Napa and Sonoma." As you can tell from other books listed on this blog, I enjoy reading books on wine and the history surrounding the wine industry (House of Mondavi is still tops on my list). Unfortunately, this isn't one of the better ones.

As one reviewer on Amazon put it well, Deutschman's writing results in a "fast food book about a gourmet subject." Deutschman's book is light, gossipy and doesn't really seem to have a plot line, substantial characters, or an overall point (at least tell us how the Screaming Eagle tasted!). Even if you enjoy reading books on wine/Sonoma/Napa, I'd skip this one.

PS - Here's what I was doing while not reading A Tale of Two Valleys:

Posted by Jeff Richards at 1:42 PM | Permalink | Comments (0)

I'll be speaking on a panel tomorrow (9:45 am) at FierceMarket's IPTV Evolution conference at the LA Convention Center. The topic of the panel is "IPTV or Online Video - What's the Next Generation of TV?" The event is a mix of attendees and speakers from the cable, telecom and Internet industries, and our panel features speakers from MTV Networks, Technicolor and TVN. Should be an interesting debate...

Posted by Jeff Richards at 12:27 AM | Permalink | Comments (0)

I was asked by a casual reader of my blog the other day "where you been?" A family move and lots of unpacking of boxes, mixed in with the usual dose of work travel, have left little time for blogging over the past few weeks. Now that the dust has settled, I'll get back to writing. It was good to hear somebody missed my posts, though!

Posted by Jeff Richards at 12:15 AM | Permalink | Comments (0)