The Portability of Paid Video

 

For all the noise about free video content in 2005, we also entered into a bold new paid video content era. Apple’s iTunes made premium TV shows playable on portable devices, Sony’s PSP allowed audiences to watch UMD (define) movies on the go, mobile carriers created video networks, and Microsoft’s Xbox 360 put a Windows Media Center extender in every living room (that could find or afford one).

2006 is continuing the trend. This week at the Consumer Electronics Show (CES), Google announced the opening of the Google Video Store, where content producers can upload their video content and name their price (with Google taking a cut, of course). And Yahoo has announced Yahoo Go, which will also find its way into the mix.

The underlying theme here, as we race ever-closer to true media and device convergence, is people now have the ability to consume video-based content wherever and whenever they want it. At least, that’s what the PR machines keep telling us.

This may appear to be true, but a closer, more cynical look at today’s landscape challenges that belief. Even though we can download all kinds of video to all kinds of devices, the ability to move content from device to device has been fairly crippled. Video bought from the iTunes store plays only on an iPod video or your PC. Google’s video offerings currently only play on Google and Google’s Video Player. The iPod video at least can have a TV-out connection to watch content on a big screen, if formatted properly. Forget about watching that video you see on your phone anywhere else — even if you bought it. DRM (define) restrictions on virtually all video rights now inhibit people’s desire to own something and take it with them wherever they go or watch it on whatever device they own.

It’s not only about piracy paranoia, or “piranoia.” It’s also about companies with interests in other areas having to look out for those interests. For example, Sony has proprietary media storage formats such as the Memory Stick to protect. Apple’s got its iPod sales figures to grow. Microsoft has Windows Media Center Editions to sell.

Though we may never completely get rid of said limitations, the current landscape might be different a year (or less) from now.

One of the biggest things to hit content portability will be the new Microsoft Windows Vista OS (define). Incorporating many features of what is currently known as Windows XP Media Center Edition 2005, every new Windows OS will have the ability to stream content from room to room, or across a network, assuming the box receiving it is classified as a Microsoft-approved extender, such as the Xbox 360. If widespread consumer adoption of a new Windows OS happens as it has historically, we’ll all be able to have a central media-serving nervous system feeding content throughout our homes.

The real battle will happen should true competitors surface to battle the iPod for market share. If these are approved Windows devices, we’ll be able to see content taken from a home PC to a portable media player, with all digital rights intact.

Where does that leave other, hardware-agnostic companies such as Yahoo and Google? In Google’s case, the real magic happens when a critical mass of PCs (or similar Internet-connected devices) become connected to TVs. Then its proprietary, protected formats can play on much larger screens, as they do currently when one orders shows on demand from a local digital cable provider. Yahoo’s platform will likely work similarly, but it seems to want to own the entire interface within which audiences consume its media. If this plan is remotely as successful as its interface has been on the Web, Yahoo may have a real winner on its hands. With Terry Semel at the helm, it likely won’t just be content delivery that sets Yahoo apart — it may be the content itself.

We’re already seeing upstart companies jump on the portability train, such as blinkx. Blinkx can now send video search results directly to an iTunes podcast playlist for download onto an iPod. Brilliant.

If 2005 was the year of online video, 2006 will be the year video becomes practical and truly portable. Consumers demand this content portability. If they buy something, they want to own it. Advertisers, content providers, publishers, and hardware manufacturers that deliver on this demand will be the big winners in the end.

What do you think will happen? Who’s doing it right? Who’s got the wrong idea? I’d love to hear your thoughts.

 

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