Amazon has announced they will stop selling streaming boxes and devices from Apple and Google including Chromecast, Nexus Player and Apple TV. Marketplace sellers are no longer allowed to list new streaming boxes/sticks from Apple and Google and current products will be removed for sale on October 29th. Amazon says they have made the decision to stop listing these items for sale since they don’t currently run Amazon’s Prime streaming service and that Amazon wants to “avoid customer confusion”.

While that sounds like a weak excuse on Amazon’s part, we don’t know all of the details and it could be that Apple and Google won’t allow Amazon on their devices. If that’s the case, it makes sense that Amazon would fight back by pulling Apple and Google devices from their store. Amazon makes very little money on devices that cost $35 and $99 dollars, so the decision isn’t based on revenue. It’s a strategic decision on Amazon’s part. But it does hurt Amazon’s customer experience as one of the main reasons I shop at Amazon, is due to their selection. Having less inventory is a bad thing for Amazon overall.

While some have suggested that this will impact sales for Apple and Google, it really won’t. With Apple having their own stores, and Chromecast being sold in every store imaginable, consumers won’t have a hard time getting them. Makes it a bit of an annoyance for someone like me that shops at Amazon, but if I really want an Apple TV or Chromecast, my local Staples will have them, as well as many other stores.

But this is an interesting development to watch because if this is really about avoiding “customer confusion”, does Amazon plan to stop selling Smart TVs that don’t support Prime streaming? What about Blu-ray players? How far is Amazon going to take this? My guess is that Amazon only cares about devices made by Apple and Google and those will be the only devices that are impacted. If that’s true, it means this isn’t about avoiding confusion at all, it’s simply Amazon flexing their power against their competitors. But the real question we all want to know the answer to is if Amazon made this decision on their own, or if Apple and Google forced their hand. I’m sure something will leak out at some point and we will hear more details behind this decision.

Updated 10:17pm ET – One of the two companies mentioned reached out to me to after I published to tell me that they are not blocking Amazon from being on their box. They won’t allow me to quote them or say which of the two companies it is, but it appears this is purely a decision driven by Amazon alone.

“Picture-in-Picture”, the iPad only feature that comes with the iOS 9 update on newer iPads, is a new multitasking tool that requires minimal effort to integrate on existing video apps. This is also the first time Apple is introducing true multitasking on iOS, and it is unlocking exciting new opportunities and use cases for app developers. I’ve just started seeing some content owners take advantage of it and it looks as if it will quickly become a standard feature.

For users, using PiP is seamless. It works automatically without requiring any activation. While in an app, simply press the home button and the video will minimize to the bottom corner of the iPad screen. You can then expand the size of the video box and move it around and reposition it. This is a significant new feature especially for video streaming apps. In talking with Haystack TV, a video news platform, the company has already taken advantage of PiP where news clips will now play continuously while users are multitasking outside of the app. For example, users can check their email while watching the news or even search the web for more background information on a particular news clip that’s playing in PiP mode.

For iOS developers, the integration is easy if you use AVPlayerViewController or WKWebView. As long as the user has the video playing full screen, the support for PiP is available without requiring further development. Keep in mind that with all implementation, developers will need to set the media AV session to AVAudioSessionCategoryPlayback to enable their app to run in the background. For those using AVFoundation, the process could be a little more complex and may call for a AVQueuePlayer to ensure video clips continue to play sequentially in PiP mode. You would also need to make use of the AVPictureInPictureController to handle the controls and state changes for starting and ending PiP. It requires a little more work but should not create too much of a roadblock.

This new iPad-only feature essentially mirrors how users are using their home TVs – watching video on the big screen while also utilizing a second screen to browse or interact with others on social media. According to an Accenture report, 87% of consumers use more than one device at a time. Bottom line, it’s a feature that could significantly improve user experience while not requiring too much effort to build.

Over the past few weeks, everyone in digital media circles has been talking about the HEVC/H.265 video coding standard including who’s adopting it, how much it will cost to license and what the launch of the Open Media Alliance might mean. The spotlight on video has burned so bright that next-gen audio has not been covered at all. This relative obscurity is unwarranted, however, given both the complementarity of these two next-gen technologies and the imminence of important standards-based decisions.

There have been dramatic technological improvements in audio ready to be broadly deployed and adopted to support the advanced video features about which everyone is talking. As consumers flock to update their home theaters, and also their mobile devices, the pressure is on to deliver something that also sounds fantastic. And 3D audio delivers that perfect complement to 4K UHD content.

Using 3D audio, sound sources can be placed in virtual locations. This allows audio to sound as if it is coming from any direction—such as from behind, above or below a listener—regardless of the location of the speakers. Proponents of 3D audio describe it as an “immersive technology,” and for anyone who has experienced it, it seems almost unreal, clearly a step-change in user experience.

As with any new technology, a “Beta vs. VHS” watershed moment for adoption is likely to happen. For 3D audio, that moment could be a decision expected this fall concerning “ATSC 3.0” by the Advanced Television Standards Committee. By way of background, the ATSC is a global nonprofit whose membership includes broadcasters, electronics manufacturers, broadcast equipment makers, regulators and related experts. ATSC ushered in the era of digital television, and its new standardization process is being watched closely by many industry observers for TV and beyond. Its 3.0 audio and video selections will potentially be deployed in billions of devices and content titles over the next decade. For video, the main contender is HEVC. For audio it’s up for grabs, with MPEG-H 3D Audio and AC-4 vying for adoption. Another technology, DTS had been in contention as well, but it has been withdrawn from ATSC consideration.

The ATSC’s decision on audio is expected to occur in October, and a host of technical issues are being debated and carefully evaluated concerning, among other things, readiness for adoption. But as anyone familiar with standards would tell you, however, it’s not only about technical features and readiness for adoption. A major issue to be discussed and debated by the ATSC and certainly by industry relates to intellectual property rights and to licensing. The business model supporting a large number of innovations in the audio and video industries consists of sophisticated R&D outfits investing heavily in creating improved generations of technology (and, of course, patenting the resulting inventions), and then licensing those technologies and intellectual property to industry adopters.

The Dolby AC-4 technology is standardized through ETSI and Dolby has submitted a licensing declaration to ETSI. Just last week Dolby published some details on their program and pricing. To get some more details about all of this, I spoke to the experts at Black Stone IP who track the audio licensing market very closely. Elvir Causevic and Ed Fish from Black Stone IP told me that from their review of ETSI declarations, “it appears that Dolby is the only one with patents covering AC-4 technology”. This is consistent with Dolby’s history, where they traditionally have all, or nearly all, of the patents required for their technology. The announced licensing rates at high volume, for the entire system (plus software, support, etc.) is at $0.15 for mobile devices.

As concerns MPEG-H 3D, this Audio standard was developed by the ISO/IEC Moving Picture Experts Group (MPEG), and the normative requirements were formalized as the MPEG-H 3D Audio Main Profile. Black Stone IP recently published a research report utilizing publicly available data, including available patent and pricing information, to arrive at an estimate of what licensing the MPEG-H 3D Audio Main Profile will cost.

Black Stone IP says that for MPEG-H 3D Audio, the implementation of the full standard in its “Main Profile” requires incorporation of six underlying standards, meaning that licenses may be needed from numerous patent holders and even patent pools in the U.S. and around the world. Those six standards are HE-AAC, MPEG- Surround, SAOC, USAC, MPEG-DRC, and finally the specific “new features” unique to MPEG-H, such as “higher order ambisonics.”

Black Stone IP has estimated that the aggregate MPEG-H 3D Audio Main Profile per-unit royalty payment, for a low-volume product, in the 500,000-unit-shipment range, could be in the range of $2.92 to $3.62. In the case of higher-volume products, in the 75-million-unit range, estimated payments would be expected to be lower, varying in the range of $0.44 to $0.80, as detailed in the table below. Black Stone IP mentioned that they could not exclude the possibility of some MPEG-H 3D Audio Main Profile patent holders asking for content-related service fees (not to be confused with “content fees,” which it has not seen being proposed).

Recently, two of the three MPEG-H Audio Alliance licensors, Technicolor and Fraunhofer, announced a program license for their patents “based on a comparatively small but still powerful subset of the MPEG-H 3D Audio standard,” with pricing from $0.15 to $0.99, depending on volume, and no content-related services fees. It is not clear to Black Stone IP, however, which features and tools from their category “MPEG-H New Features” or other underlying standards are included in this license pricing, despite a careful study of the announcement and publicly available materials. While this issue may be cleared up in future announcements, there will be natural concerns as to which features may be avoided from the implementation and what will be the feature set and quality of what is left. In its analysis, Black Stone IP counted over 2,000 individual company patents and patent applications that have potential applicability to MPEG-H 3D Audio Main Profile, across dozens of companies, some of which very sophisticated IP licensors.

Comparing Video Licensing Costs and Audio Licensing Costs
Consider video IP licensing costs for HEVC. One patent pool, led by MPEG-LA, has announced a single rate of $0.20 per unit for all devices and regions. A second pool, HEVC Advance, announced a range of pricing, with lowest cost of $0.50 for mobile devices in Region 1 markets, and $0.25 in Region 2 markets. Other patent holders not in the two existing pools have yet to make public announcements on their requested HEVC licensing rates.

With estimated MPEG-H 3D Audio main profile licensing at a cost of $0.44 – $0.80, at best, for high volume, one can see that implementors should pay close attention to, and consider potential licensing costs of, audio in parallel with technical evaluations of 3D audio.

3D audio is transformational and critical for wider adoption of next generation consumer devices, and may, in fact, influence the timing of adoption of video as well. Many consumers consider audio an important factor in the hardware system they purchase for the playback of video. As the ATSC and the entire media industry consider which audio technology should be paired with HEVC for the new generation of home theater and other applications, it seems evident that a fine balance needs to be struck between the commercial quality that consumers now require and the pricing of intellectual property licenses that will be needed depending on solutions chosen.

According to Elvir Causevic, Black Stone IP’s CEO, “while industry attention all summer has focused on the next generation video standard, the ATSC’s decision in October will be an important moment for the next generation audio technology that is key to the home theater consumer experience. As with any standard, IP licensing costs and predictability should be a critical part of the assessment.” I will try to provide a follow up post next month after the ATSC makes their decision. For more on this topic, check out Black Stone IP’s recently published reports.

It looks like patent licensing administrator HEVC Advance has finally realized that the fees they are charging content owners to license patents from their pool are too high. In a press release announcing that integrated circuit designer MediaTek has agreed to join HEVC Advance, they also mention that they have, “received significant market feedback, particularly on content fees, and will adjust fees to support widespread use of HEVC”. They haven’t yet said how the fee structure will change, but mention that HEVC Advance is actively soliciting input from market participants and considering adjustments to arrive at a royalty structure that enables continued and rapid adoption of HEVC. [see: New Patent Pool Wants 0.5% Of Every Content Owner/Distributor’s Gross Revenue For Higher Quality Video]

It’s a bit of a confusing message as they say they will “consider” adjusting fees, but then later say they “will adjust” them. Either way, it sounds like the companies that make up HEVC Advance are coming to their senses and realizing the rates they are charging are not ones that content owners are willing to pay. [see: Companies Should Reject Licensing Terms From HEVC Advance Patent Pool] I’ve reached out to HEVC Advance to see if they are willing to share more details, but I don’t expect them to be able to say too much right now. Either way this is good news for the industry as I have heard from numerous content owners who made it clear to me that they did not plan to pay the current fees to HEVC Advance and that they would fight any lawsuit brought against them by the patent holders. Lawsuits help no one, so coming to terms that both sides can agree on, that are actually fair, is a much better way to do it and the approach that HEVC Advance should have taken from day one.

To date, HEVC has been a term that’s primarily used by those in the content, broadcast and video ecosystem industries. Very few consumers know what HEVC is outside of those who are tech nerds or video quality fanatics. But that may change over time as Amazon is now promoting the value of HEVC to consumers and the impact it has on video quality. In conjunction with Amazon’s announcement of upgraded Fire TV and streaming stick hardware, the company specifically calls out HEVC on the Fire TV product page.

Amazon notes that their Fire TV box is “built to support High Efficiency Video Coding (HEVC).” Amazon explains that, “HEVC is approximately 2x more efficient at encoding video than the current industry standard, which means less bandwidth is needed to deliver high-quality video streams. As a result, the majority of Fire TV customers will now experience more high-quality, 1080p streams from Amazon Video.” Interesting. To date I haven’t seen any streaming device manufacturer highlight HEVC and use it as a selling point. Most consumers still won’t pick up on what HEVC is, but over time HEVC will become a better known technology if CE manufactures highlight HEVC’s value.

As much as I like what Amazon is doing in highlighting HEVC, I don’t like the confusion they are creating around 4K and over-the-air terminology. The new Fire TV box supports 4K streaming, the first sub-$99 box in the market to do so. Even the new Apple TV box doesn’t support 4K yet. And while we still have many years before 4K really matters to the public, getting more 4K capable devices in the market, at a $99 price point is a good start. But Amazon is creating some confusion around their support for 4K.

On the Fire TV page, Amazon says that the, “all-new Amazon Fire TV now supports 4K Ultra HD for true-to-life picture quality. Watch high-definition 1080p streams on Amazon Video, Netflix, Hulu and more, even without a 4K TV.” Why bring up 4K TV’s when discussing 1080p? Using both of those terms, in the same sentence will only create confusion amongst many consumers. Amazon also calls out “cord cutters” and says if you want local channels, you can “add an HD antenna to your home entertainment system.” Amazon even provides a link on the Fire TV page to an antenna you can add to your cart. Consumers will take that to mean you can add an OTA antenna to Fire TV, which you can’t. Many think of the Fire TV as their “home entertainment system”, as Amazon calls it, so why even call out HD Antenna’s when Fire TV can’t pull in or record anything OTA? All that does is add more confusion for consumers, who already have a lot of choices in the market when it comes to content services and streaming hardware.

This afternoon I called FiOS tech support to ask them to stop sending me emails about the pope’s schedule of when he is on TV and what channel to watch. Verizon provides no unsubscribe link and offers customers no way to opt out, so you have to call them to make the emails stop. I was transferred from tech support to sales who said they would remove me, but also told me that I should consider upgrading my 50Mbps service to 75Mbps a month as I was told that Verizon considers me a “heavy user” of their services. When I asked the rep how Verizon defines a “heavy user”, I was told that in the last 30 days, I have had 8 unique devices connect to my Internet connection. The rep also told me that I average between 30Mbps and 130Mbps a month, which of course makes no sense.

If the rep was talking throughput, I max out at 50Mbps, there is no way I could be at 130Mbps. And if she was talking total bits delivered, 130MB would be almost nothing. I asked her if she was talking speed or throughput, but she didn’t know. She told me that based on my usage, I would get better quality Netflix streaming if I went from my current 50Mbps a month plan, to 75Mbps a month and wanted me to upgrade due to “current special offers”. When I asked her to explain to me how I would get better quality, she said if the Netflix movie were 75Mbps in size, it would download faster on a 75Mbps connection than my current 50Mbps connection.

Of course we all know that Netflix doesn’t download anything, so her example is totally bogus. I explained this to the rep and pointed her to Netflix’s ISP Speed Index chart that shows for the month of August, Netflix streams delivered over Verizon averaged 3.64Mbps. So even if I had 8 devices all streaming Netflix at once, I would be at 29.12Mbps, still well below my current 50Mbps that I pay for each month. I’ve streamed HBO from 10 devices in my home, all at the same time, without any problems on my 50Mbps a month plan. Of course, the rep didn’t know what the Netflix’s ISP Speed Index chart was and still kept saying the word “download” in reference to Netflix.

Not to be deterred, the rep then asked me if I had the new iPhone 6 and told me I should upgrade to 75Mbps if I did, as she said the new iPhone has “faster technology” that would work better if I had 75Mbps. Of course, she could not explain to me what the faster technology actually was and just used high-level and generic terms that mean nothing. When I again asked her to explain to me the difference between speed and throughput, she didn’t have an answer. This is the same Verizon FiOS scam I wrote about in April of this year.

Time after time, I keep getting this same pitch from Verizon, trying to get me to upgrade my service based on a flat-out lie of “better”, “faster”, or “smoother” Netflix streaming. And why don’t their reps know the difference between speed and throughput?! Speed is the rate at which packets get from one location to another. Throughput is the average rate of successful message delivery over a communication channel. Simply saying the rep did not know or was not educated enough is not an excuse! When reps don’t know the basics, they will make stuff up. They have a responsibility to be accurate and set proper expectations with consumers as well as received the right kind of training on the services they are selling. If you think Netflix is “downloading” movies you should NOT be selling Internet services.

Last time I blogged about this, Verizon said it was an isolated incident. It’s not. It’s widespread and I’ve gotten the same pitch four times now, all from different people inside the FiOS department. If Verizon is going to continue to deny to the media that they are actively trying to upsell consumers based on a lie, then I am going to start recording my calls with Verizon reps and posting them here on my blog, for everyone to hear. That will make it much harder for Verizon to say it’s an isolated incident. I am putting Verizon on notice that from here on out, every call I have with anyone in the FiOS group will be recorded.

If someone from the FTC is reading this, please contact me. Verizon needs to be forced to stop this practice as the definition of a scam is, “to swindle someone by means of a trick”. That’s definitely what Verizon is doing; trying to “trick” consumers and many who don’t know better and don’t understand the technology will fall for it, and pay for something they do not need.

Server-side ad insertion has normally been about tackling the problems of ad blocking and device fragmentation. But we are now seeing platform shifts that change the sweet spot of ad stitching towards live and catch up TV. Client side ad SDKs have grown in sophistication, the platforms they run have become more capable and the transition to native apps brings tools for platform normalization. This enables publishers to deliver VOD client side ads very effectively. Even with these improvements, client SDKs don’t deliver a live broadcast experience for live or catch up TV. This shift to focus on live imposes some additional requirements outside of ad stitching’s traditional ad block and device fragmentation coverage, such as frame accurate inserts, and high performance in a real-time live broadcast environment.

To frame the discussion it’s important to understand why client side fulfillment is desirable in the first place. Fulfilling ads on the client satisfies two main areas user authenticity and interactivity. Interactive components, such as clickable ads, companions can largely be accomplished with more complex server side ad stitching solutions but as the client side SDK grows in complexity, publishers are quickly left asking why they are not using a client side SDK in the first place. This problem is mostly negated where the player and ad stitching are coming from the same vendor since they will be pre-integrated. Authenticity methods are more difficult to satisfy server side since hybrid systems only give you partial coverage if the server is ultimately making the fulfillment request on behalf of the user.

In a recent discussion I had with Michael Dale at Kaltura, which just announced an ad-stitching collaboration with WeatherNationTV, we discussed why the traditional strong points of ad stitching are losing favor. As Michael pointed out, while ad blocking tools have increased in capability, their ability to target closed platforms such as OTT streaming devices and native applications on iOS and Android has been limited. As video consumption continues it’s aggressive transition to these devices ad blocking is less of a reason to use ad stitching.

Additionally in desktop environments there are emerging solutions such as “secret media” that work around ad blockers while retaining client side fulfillment. Ad blocking on the router level with “Tomato” firmware or AdBlock Plus supplied blacklists, is a complicated technical task, and has been made more complex with the transition to https everywhere. For example iOS 9 recommends using https only for new apps. While lots of press is given to iOS 9 “ad block” support, it probably will have little impact on video experiences taking place in native apps, and ad playback within non-native was already hampered by Apple’s iOS native controls.

Device fragmentation was universally recognized as an inhibitor towards high quality consumer media delivery, and has largely been addressed by several industry infinitives. The transition to native application runtimes has enabled publishers to include their own “players” with first class Ad integration. For example Google’s exoPlayer on Android provides both HLS normalization and a reference DoubleClick integration and online video platforms have heavily invested in native player SDKs for easy video app creation. There is still a valid argument per fragmentation on streaming devices and smart TV’s. But even here, we are increasingly seeing “capable enough” HTML5 runtimes via hbbTV initiative, and on popular streaming devices such as Chromecast and Fire TV. The evolution of these platforms, to include a capable HTML5 runtime, enables syndication of player run-times and player business logic.

Live is a different story. Unlike VOD where fulfillment delays have a negligible impact on the user experience in a live broadcast frame accurate cuts are important as live content comes back from commercial break to immediate critical content. Likewise catchup-TV infrastructure can require block out or ad inserts on-top of existing ads prior to the content being segmented and re-ingested as “VOD” content. The value of client side heuristic for ad beaconing, interactivity are still important so working with a live ad stitching solution that is integrated with the player is important. This integration enables the player to consume ad timing, companion click through and ad viewing beacon targets from the server and handle them appropriately client side. Because native SDK integration is already needed for addressing fragmentation and client side ads, a holistic solution covering both client side and server side ad interactivity is important towards controlling integration costs for publishers that are streaming both live and VOD content.

Because of these unique requirements, live ad stitching is critical component as part of an overall solution that includes native SDKs and client side fulfillment for publishers and service providers that are making ad monetize live and VOD content available within distribution to native devices and set top boxes. And with all the recent vendor acquisitions in the market, especially around live linear workflows, ad stitching for live is going to become even more important in the monetization discussion moving forward.