Video next to stream from cyberspace
The promise of internet-based video has long been hamstrung by copyright and piracy worries, slow dial-up connections, technical challenges and consumer disdain for watching blotchy videos on their home computers.
But a new Silicon Valley company is tackling those obstacles, hoping to become the first major provider of cinema straight from the internet to the living room computer.
“Twenty years from now, everyone’s going to be getting all their video mostly from the internet,” says Steve Shannon, founder of Akimbo Systems.
“You see it happening with music. You see it happening with phone service. Video is next.”
With new video and copy-protection technologies, and the rapid expansion of high-speed broadband connections, the time may be ripe.
Akimbo hopes to tap the vast vault of programming floating on the internet, repackage it in DVD-quality, and bring it to a set-top box so viewers can easily choose what they want to watch from their sofa – not from their desktop.
The San Mateo-based startup, which delayed its launch date from the summer to October after it hit technical snags, appears poised to be the first to deliver an internet-to-TV video-on-demand service. Akimbo is targeting an audience that craves more than the programming on conventional TV and cable networks.
But it is unclear whether even the most dedicated video junkies will be willing to buy another set-top box and pay an additional monthly subscription fee. Akimbo also faces steep competition from larger rivals in the potentially lucrative market.
SBC Communications and EchoStar Communications have teamed up to launch an online movie-on-demand service next year. Digital video recording pioneer TiVo is also working on a product that will connect web content to the TV screen.
Video content piped into homes through the internet does not face the spectrum constraints of broadcast television. Expanding the video catalogue - “scalability” in industry jargon – is relatively easy by adding more computer servers for storage.
The typical cost of transporting video data over the internet has dropped from £20 per gigabyte in 2001 to less than 60p per gigabyte today, said Shannon, a former marketing executive at ReplayTV, another pioneer in digital video recording.
“It’ll be the nirvana of video on demand,” Shannon said. ”And the only architecture that can bring that is the internet.”
But will consumers, many of whom already have tall stacks of electronic boxes by their TVs, open their wallets? Akimbo subscribers must first buy a £130 (€191) Akimbo Player set-top box, then pay a basic monthly service fee of about £6 (€8.80).
“You’re competing against a lot of consumer electronic gadgets out there and many consumers are paying almost triple-digit monthly fees for video entertainment, so how much more are consumers going to pay for entertainment in the living room?” asked Sean Badding, an industry analyst at The Carmel Group market research firm.
“If you give people content that they’re passionate about and that they can’t get anywhere else, they’ll be willing to pay for it,” said Josh Goldman, Akimbo’s chief executive.
At launch, Akimbo promises to have a library of more than 20,000 hours of video from 50 content providers, including independent films and shorts from iFilms and AmazeFilms foreign language shows from the Caribbean, Africa, Asia and the Middle East and a smorgasbord of specialty sports events ranging from boxing to sailboarding.
Adult-oriented entertainment, including Canada’s Naked News and Danni’s Hard Drive, a sexually-explicit website, will be available. Parental controls will be included to limit children’s access to selected content.
The plan is to offer mainstream content later. Analysts say Akimbo is shrewd to begin with relatively esoteric programming not yet available on cable or major networks.
“That’s their competitive edge,” Badding said. “They don’t want to go head-on right now with cable operators with mainstream content.”
Although Hollywood is warming to internet-based video, offerings such as CinemaNow, MovieLink or Starz Encore are limited.
Without a product like Akimbo’s, video on the internet can be streamed from a computer to a television. But consumers must have either a PC near the TV or some kind of media adapter and a home computer network – not to mention technical know-how, drastically reducing the potential number of users.
CinemaNow, an Internet video-on-demand service eager for a new source of customers, will provide its content on Akimbo’s service. Only 10% to 20% of CinemaNow’s users go through the trouble of linking their computer network and televisions, said Bruce Eisen, CinemaNow’s executive vice president.
“It’s not easy to marry the TV with a PC,” Eisen said, ”but Akimbo takes content off the internet and puts it on the TV in an easy-to-use fashion.”
