MIT Panel on Media, Tech, and Entertainment

Moderated a panel earlier today on media, technology, and entertainment at the 11th annual MIT Venture Capital Conference. My panelists included:

Jeremy Allaire
CEO, Brightcove

John Lanza
IP Practice Group Leader, Choate Hall & Stewart, LLP

Lucy McQuilken
Investment Director, Intel Capital

Neil Sequeira
General Partner, General Catalyst

We talked about Facebook, Twitter, set-top boxes, Internet video, the Kindle, Blu-ray, iTunes, copyright, piracy, videogames, and the music industry.

The MP3 is about 50 minutes long. Some of the questions during the Q&A period are a bit quiet. The file is here.

Panel on Internet Video, in Boston

Last night's sold-out MITX panel, 'Internet Video: What's Next?', was a lot of fun... and a full house despite dire warnings of impending precipitation. (Which always get Bostonians agitated.)

In the audience was a big contingent of video folks from the Globe, at least one exec from Visible Measures, video analyst Will Richmond, blogger and consultant Cesar Brea, and lots of folks from PermissionTV, one of the event's sponsors.

I won't try for a comprehensive re-cap here, but we talked about three areas: how is viewing behavior changing on the Web; how are videos made and distributed, and how are they monetized and measured.

No one has yet solved the problem for the mainstream consumer of getting Internet video onto a TV. Mike Hirshland of Polaris Venture Partners said that it could wind up being the player who can most successfully do deals with cable companies -- a risky prospect for venture capitalists to bet on. He said he'd earlier invested in a company, Ucentric Systems, that tried to built a next-gen set-top box, but was about eight years too early.

The panel seemed to agree that story and content trump production values. Denise DiIanni of WGBH recalled that several years back, filmmakers working with 'Nova' resisted shooting on video and tried to stick with 16 millimeter film. But the audience didn't see the difference, and didn't care.

Hirshland said that pre-roll advertising is already dead, and that the ad formats that will win will be highly targeted, and allow the viewer to choose to engage with them, rather than forcing a viewer to sit through them.

Someone from the audience asked a great question about how Internet video will evolve. Right now, he said, we're treating it like TV -- but it'll likely turn into something different. Denise DiIanni of WGBH had a great reply, which is that Internet video allows for conversations between the creator of media and the consumer -- putting both on a level playing field.

Videoblogger Steve Garfield, sitting in the audience, showed us how he does liveblogging with his Nokia N95 cell phone. Using QIK, he streamed video while he was talking.

After the panel, I had an interesting chat with Cesar Brea, who said that an impending recession will likely force advertisers to get serious about Internet video, emphasizing solid measurement and accountability. IE, it may shift things more to a pay-per-click model, as opposed to pay-per-impression.

Finally, here are some of the clips that we showed and talked about at the start of the panel....

- Boston.com 'Office Invasion': Harmonix Music Systems

- WGBH: War Games

- Mike Hirshland's interview with Scott Kurnit

- TMZ video of Tara Reid, hosted by Brightcove

- Boston Celtics VOD, from Boston.tv

- Dean Whitney from Digitas showed these videos, one in HD and hosted by BitGravity

From the World of Online Video: News on Advertising, Picture Quality

- Google seems determined to play a big role in the business of inserting ads into online video. I covered an announcement they're making today in Variety. From the story:

"Video units" -- essentially Internet video players that can be integrated into a website -- will display two different kinds of advertising, both pegged to the content of the site and the subject matter of the video itself. Content in the players will come from YouTube, the video-hosting service Google bought last year for $1.65 billion. The resulting revenue will be split three ways, with the site owner, content owner and Google all taking a slice.

The video units are part of Google's AdSense advertising network, which generates a big chunk of the company's revenues, $1.35 billion in the second quarter alone.

Google had earlier begun placing video ads on the thousands of sites that are part of the AdSense network, and YouTube recently began to test ads that played during its videos.

- And Brightcove has announced that it is working with BitTorrent, the peer-to-peer distribution system, to improve the image quality of its videos. From the Forbes piece:

"It's going to be a very significant shift," contends [Brightcove VP Adam] Berrey. " We've seen an explosive growth in short-form video clips, and this will allow longer format files as well. It's definitely a significant step in the evolution of Internet TV."

The Journal's story about the Brightcove deal also mentions a new company called Move Networks, which is also working to improve video quality. Peter Grant writes:

Move Networks, based in American Fork, Utah, has developed a technology that streams video at the fastest rate possible based on the user's computer, broadband connection and traffic on the network. Move Networks and its customers also are able to deliver high picture quality because content is stored on numerous servers throughout the country rather than at one central location.

An Emerging Issue: Capturing and Storing Flash Video

Think back to the 1970s (if you're old enough): there was no way to capture and replay anything that aired on TV. When Sony's Betamax videocassette recorder was introduced, media companies got a little upset. Two of them, Universal and Disney, sued Sony all the way to the US Supreme court to keep people from recording shows and movies off the air. (They lost.)

A new version of RealNetworks' RealPlayer software is beginning to spark a similar conflict: it allows you to store and later play back any of the Flash video you encounter on the Web. (Flash is the format used on YouTube, Brightcove, and many other sites, intended to stream content to your computer temporarily -- but not allow you to store it. Flash is most likely the dominant format in which video is delivered online today.) RealPlayer allows you to create a personal playlist made up of any of the video you encounter on the Web, whether it's in the Flash, Windows Media, QuickTime, or Real formats. The tagline is: "Find the Web video you want -- and Real it in." (Of course, there is already software like Tubesock that allows you to store Flash...it's just not marketed by a company as big as RealNetworks.)

Some of the debate over capturing Flash (and the other formats) has been playing out on Andy Plesser's Beet.TV site. Here's a post headlined, 'It's War: Brightcove's Jeremy Allaire Says New ReadlNetworks Video Player is Illegal Piracy.'

Adobe, which developed the Flash video format, and is working on a software program of its own to allow Flash video to be stored and managed, isn't wild about the new RealNetworks player, either.

And here's an Information Week article on some of the legal implications.

Two of the big issues media companies worry about: if users can store and replay Flash and other formats, how can we keep tabs on how many times our content is being played? And, secondarily, if that's content that we're hoping to support by integrating advertising, how can we insert new advertising every time it is played if the content is being stored and played back with software we don't control?

This is going to be a hotly-debated area for the next couple years, but something tells me that media companies might have to concede that with digital video, not every play is going to be trackable, and not every play is going to present a fresh opportunity to insert ads ..... just as was the case with the VCR when you recorded that episode of "Diff'rent Strokes" and watched it over and over again.

When I hear Jeremy Allaire of Brightcove using the words "illegal piracy" to describe what the new RealPlayer is doing, I hear echoes of the way that Universal execs Lew Wasserman and Sid Sheinberg (and later, MPAA chief Jack Valenti) responded to the VCR.

Your thoughts?