This morning, San Francisco based Episodic announced via their website that they have been acquired by Google. Terms of the deal have not yet been announced and I will update this post if I hear how much Google valued the company at. While Episodic had been operating in the market for a few years, they were a small player and it's clear that this was a technology acquisition on Google's part. I've reached out to Episodic's CEO and will update the post if I hear back.

Updated: I heard back from Episodic's CEO Noam Lovinsky who sent over an email stating that, "I don't have any additional info to share right now". The email looks to be a prepared email they are sending out to anyone who asks about the deal, which comes as no surprise considering it involves Google.

In my post yesterday entitled "Many Content Owners Can't Afford To Make Their Videos Available For iPad", many readers left comments making it clear that they blame Adobe for the lack of Flash video support on the iPad. Too many simply want to disregard the additional costs a content owner has to support the iPad by blaming supposed shortcomings in Flash, even though we've seen data from tests to show that these shortcomings do not exist.

Reading many of the comments on my post it's clear that some just want an excuse to bash Flash, yet if my content was in Silverlight, I don't think they would be saying the same thing. If someone does not like Flash, that's fine, they have every right to. But their dislike for a platform gives them no grounds to stand on to say that there are no additional costs to content owners to support video on the iPad.

Yes, Brightcove and other online video platforms can re-encode the content for free, but StreamingMedia.com only has that option because Brightcove nicely gave us a free account years ago. Before that, we had to encode our content like many content owners do, without using a video platform, which is the way a lot of content owners still do it today. None of the folks who commented addressed any of the additional hosting costs that can be associated with video for the iPad. They imply that it's easy and cheap to re-encode, yet many, but not all, video platform providers charge content owners based on the number of assets in their system at any given time. So in many cases, content owners would be paying for 2x the number of video clips each month.

And for those that said I can just hire someone some college kid to re-encode the content for cheap, that's my point, I still have to hire someone to do it. Even if I only paid them $10 an hour, how many hours will it take to re-encode thousands of clips? It's not cheap no matter how you slice it.

Too many people also have this notion that "open standards" exist with video, which is flat our wrong. H.264 is not open as it is owned by MPEG LA and encoders and decoders require licensing which is something no one seems to talk about when browser support is debated. To imply that there is no cost to a content owner or that converting lots of videos for support on the iPad is easy, quick or cheap is ignoring the facts.

If Safari on the iPad supported Flash, as a content owner I would have ZERO costs. As one person said in the comments, "to purposefully want to break the whole web for your gadget is absolutely disingenuous just to stick it to Adobe." And they are right. Apple wants us to believe the reason they don't support Flash is because it's a "CPU hog", yet based on testing we've seen, that's not accurate.
This is simply Apple's way of trying to deflect the issue to Adobe when
it's has nothing to do with Adobe, the problem lies with Apple.

Yet some want to agree with Apple and complain about how "poor" Flash is by talking about CPU issues, call it "bloatware" or complain about security patches. As a Mac only user, how often does Apple put out OS X security updates? Very often. But I don't see them complaining about that. Many of these folks are probably the same people that have said that the growth we have seen in the industry over the past few years has been thanks in part to Flash and sites like YouTube. So they are quick to say how seamless Flash has made viewing video on the web, but then want to take Apple's side as to why the iPad should not support it.

If you don't like Flash, fine, don't support it and don't use it. But as a content owner, when Apple comes along and says they will keep their ecosystem closed, not allow any third party platforms and force content owners to jump through hoops just to have the "privilege" of having their content available on the iPad, that's wrong. That's not good for content owners, nor is it good for the consumer and it contributes to a poor user-experience with the device. Content owners should not be letting Apple get away with this. They should have a choice to support multiple platforms if they want to, yet no choice is given.

Without content, the iPad is useless. Yet many content owners are so quick to bow to Apple's demands and fall all over themselves just to be on the iPad that they don't look at the bigger picture of what this means for the rest of the industry. They are setting a really bad precedent.

I responded to many of the comments from this post in a new blog post entitled "Lack Of Flash On The iPad Is Not Due To Any "Shortcomings" With Flash, Blame Apple".

Updated April 2nd: Reading many of the comments on this post it's clear that many just want an excuse to bash Flash. If my content was in Silverlight, would you be saying the same thing? Probably not. You want to bash Flash, go right ahead. But you have no grounds to stand on to tell me there is no additional costs to content owners to support video on the iPad.

Updated May 28th: Sources cited by The New York Post's Claire Atkinson say that Time Warner and several other "large media companies" are forgoing what they claim is an expensive reformatting of their video libraries. So clearly there is a cost here, even many non-content owners want to argue that their isn't.

——–

Yes, Brightcove and other online video platforms can re-encode the content for free, but we only have that option because Brightcove nicely gave us a free account years ago. Before that, we had to encode our content like many content owners do, without using a video platform. So those numbers I outline are in fact very real for a lot of content owners. Many of you are also not addressing the issue of cost with regards to
hosting. You imply that it's easy and cheap to re-encode, yet many
video platforms charge content owners based on the number of assets in
the system each month. So now I am paying for 2x the number of video
clips, EACH MONTH.

And for those that say I can just hire someone some college kid to re-encode the content for cheap, that's my point, I still have to hire someone to do it. Even if I only paid them $10 an hour, how many hours will it take to re-encode thousands of clips? It's not cheap no matter how you slice it.

Too many people also have this notion that "open standards" exist with video, which is flat our wrong. H.264 is not open as it is owned by MPEG LA and encoders and decoders require licensing which is something no one seems to talk about when browser support is debated.

To imply that there is no cost to a content owner or that converting lots of videos for support on the iPad is easy, quick or cheap is ignoring the facts.

If Safari on the iPad supported Flash, as a content owner I would have ZERO costs. As one person said below, "to purposefully want to break the whole web for your gadget is absolutely disingenuous just to stick it to Adobe." And they are right. Apple wants us to believe the reason they don't support Flash is because it's a "CPU hog", yet based on testing we've seen, that's not accurate. This is simply Apple's way of trying to deflect the issue to Adobe when it's has nothing to do with Adobe, the problem lies with Apple.

——————–

April 1st: While news sites are very quick to highlight some of the big websites that are making their video content available for the iPad, what about all of the smaller content owners who don't have the resources or money to make that happen? All the talk on the web is about what CNN, New York Times and the other big broadcasters or news sites are doing, yet each day, the majority of websites I visit aren't in the top 50 list of largest portals on the web. What about all of the small and medium sized websites? Why is no one talking about how Apple's lack of support for Flash will impact them?

At StreamingMedia.com, we have roughly 2,500 hours of video in our portal. Video is a big portion of our business, yet it would cost us roughly $15k to have all of our videos re-encoded for the iPad. And we're a small site, with not nearly as much video content when compared to some of the mid-size portals. In addition to the cost for encoding, we'd also have to spend additional dollars and time to make our website available on the iPad, a cost we simply could not afford.

While the large portals can afford to be iPad ready, most video based websites are not going to be able to spend the money to reach a yet undetermined audience for a device that may or may not sell into the multi-millions in the first year. How can a site like ours justify spending upwards of $25k to support just one device on the market? While many large sites have said they will provide support for the iPad, what about sites like Zappos that by the end of this year, will have 50,000 product videos? Or how about eBay? They allow sellers to create and upload their own videos, yet I don't see them rushing to support the iPad as of yet.

For all the talk of how good the "user experience" is on the iPad, I wonder how so many people have forgotten so quickly the enormous reach that video has on the web today. Nearly every website I visit, large or small, has some form of video. What kind of user experience is the iPad going to provide when only the largest websites can display their video content? As a content owner, I want my content to be available via a web browser on as many devices as possible. Having someone like Apple tell content creators that iPad owners can only access their content if they jump through hoops and spend money for development, simply because Apple does not want to support technologies that are already ubiquitous, is bad for both content creators and consumers.

Over the past few days, I've been tracing the delivery paths for a bunch of online video sites on the web, including large and small sites. When it comes to tracing video content from Hulu, historically, everything I saw was always coming from Akamai. But lately, it's clear that Hulu has moved to a multi-vendor strategy and is now also using Level 3 and Limelight Networks for some of their video delivery.

While I don't know what percentage of video traffic has shifted away from Akamai and over to Level 3 and Limelight, it's not a small amount. When tracing content via Hulu's desktop client, 100% of the traces showed Limelight as the provider. I've also noticed that syndicated Hulu videos to other third party sites is being done by both Limelight and Level 3.

And on the main Hulu.com site, content I traced like The Simpsons and 30 Rock was all coming from Level 3's network. Why Hulu would switch from using one provider to at least three providers is not known and with Akamai getting aggressive on pricing, like we saw on the Netflix deal, my initial take is that it's not about price. Hulu is known for having some very strict internal comparison metrics for content delivery, yet we know that they will never make those details public or discuss whether or not delivery performance was a reason for them moving to multiple vendors.

Hulu has also seen a lot of traffic growth, so this could be their way of simply moving to a diversified delivery strategy or maybe an exercise to see what the other CDNs have to offer. I know Hulu had been testing with both Level 3 and Limelight as far back as mid last year, but clearly they are no longer in a testing phase and are passing some serious traffic now with all three vendors.

In a two-year time period between 2007 and 2008, CDN vendors raised more than $400M dollars to enter or expand their offerings in the content delivery industry. Not surprisingly, last year we saw almost no funding in the CDN space since the "rate" of traffic volumes slowed and pricing declines kept most vendors from growing their delivery business. With initial projections for 2010 pointing to a better year for CDNs, some of them have taken the opportunity to raise large rounds of funding which will be announced over the coming weeks. While some on Wall Street are already talking about the deals, I'm not giving out any details on the companies or the funding amounts, but I will say that I know of three CDNs who will announce funding deals over the coming weeks.

On Monday we'll be sending the final program for the Streaming Media East show in May to the printers. Normally I would have a bunch of speaking spots I would still be looking to fill last minute, but this year, I got so many speaking requests and many of my moderators did such a good job inviting speakers that right now, I only have one spot I'm looking to fill.

On
Wednesday, May 12, 2010 we have a panel entitled "Going Mobile: Is Portable Media Finally Here?" with speakers from ESPN Mobile, the Symbian Foundation, Motorola and Qualcomm. I'm looking for someone who specifically covers the mobile space who wants to moderate the session and is neutral when it comes to the topic. The moderator needs to have first-hand experience with using video on mobile platforms and have a good grasp of the business and technology issues at hand. If you're interested, please send me an email ASAP. Here are the details on the session:

Wednesday, May 12, 2010 – – 11:45 a.m. – 12:30 p.m.
Going Mobile: Is Portable Media Finally Here?
With the latest iPad, iPhones, Blackberry's and Palm Pre's focusing on video applications, is portable streaming finally getting ready for prime time? How is the streaming industry developing and repurposing content for mobile streaming and what will the business models look like? What will drive the adoption of mobile internet usage, and what are consumers willing to pay? Come hear what opportunities exist today for content owners and operators, as well as how the business of mobile video will change in the future.

While most ISPs have been slow to build and deploy their own CDNs, we all know that it's only a matter of time before many of them bring content delivery in-house, especially for video. While third party CDNs still get most of the press, there are quite a few vendors with solutions in the market that are enabling telcos and ISPs to become their own content delivery network. To date, we've seen very few ISPs and telcos in North America spend the time and money to build out their own CDN, yet in Europe and Asia, many ISPs are well on their way to having completed their initial build out.

Talking to many of the vendors who supply hardware and software solutions to the ISPs, the vast majority of their revenue comes from Europe and Asia, not North America which validates the trend that so far, ISPs in the U.S. have been slow to adopt an in-house model. While discussing these trends with a supplier yesterday, it was pointed out to me that the Digital Millennium Copyright Act (DMCA) includes language that tells service providers exactly how they can and can't cache third party content on their network, without the need to have any kind of deal with the content owner.

I had not looked at the DMCA in many years, but sure, enough, section 512b entitled "Limitation for System Caching" outlines the rules ISPs must follow. The limitation applies to acts of intermediate and temporary storage, when carried out through an automatic technical process for the purpose of making the material available to subscribers who subsequently request it. It is subject to the following conditions:

• The content of the retained material must not be modified.
• The provider must comply with rules about “refreshing” material—
  replacing retained copies of material with material from the original
  location— when specified in accordance with a generally accepted
  industry standard data communication protocol.
• The provider must not interfere with technology that returns “hit”
  information to the person who posted the material, where such
  technology meets certain requirements.
• The provider must limit users’ access to the material in accordance
  with conditions on access (e.g., password protection) imposed by the
  person who posted the material.
• Any material that was posted without the copyright owner’s
  authorization must be removed or blocked promptly once the service
  provider has been notified that it has been removed, blocked, or
  ordered to be removed or blocked, at the originating site.

In a conversation I had with two ISPs this morning, both of them stated that the language in the DMCA does not deter them from building their own CDN, but does create an additional headache for them when they do decide the market is big enough for them to bring video delivery in-house. While every company has their own interpretation of what is considered a "big" market and the right time to enter it, one has to think most ISPs won't be able to wait too much longer.

Outside of the U.S., European based ISPs also have to follow a set of rules as set forth in the EU European E-Commerce Directive which also lists specific rules pertaining to caching systems.

While I don't think the DMCA is stopping ISPs from building and deploying their own CDNs, some of them clearly see it as another headache to bringing content delivery in-house and putting the systems in place that are necessary to comply with the DCMA. As more ISPs build and deploy CDN systems, it's going to be interesting to watch what impact the DMCA could have since the ISPs will be taking content from third parties, without their permission, and caching it on their network.