For those near the Stamford CT area, Sib Law has started an online video Meetup group which will get together for the first time starting next month on February 11th at 7pm. Join Eric Mortensen, Director of Content Development (Blip.tv), Dana Tower, COO (Pond5), and Jamison Tilsner, Founder and COO (Tubefilter.tv) for presentations about their organizations and a panel discussion about trends in the industry and opportunities to grow revenue. While I live close to Stamford, I won't be able to make it to the event next month but hope others will be able to attend and help Sib kick off the new group. You can find all the details on the event here.

For as long as I can remember, consumers have been saying that with digital content, they want to purchase it one time and then have the ability to watch it on any device they choose. While that desire has yet to come to fruition in the market, the fact that Apple is forcing people to have to buy the same apps over and over again, just because they come out with a new device, really shows the monopoly Apple has with their iTunes platform.

I love MLB.TV, even more than Netflix streaming as I am more interested in baseball than movies. But if wanted to get MLB on the iPad, I will have to pay MLB a third time, for the same piece of content. I bought MLB.TV for the PC, MLB's AtBat app for the iPhone and then would need to buy MLB's app for the iPad. How many times do consumers have to pay for the same piece of content?

While MLB might be just fine with the current model, what If MLB wanted to include the iPhone or iPad apps as part of the MLB.TV package so that the users don't feel like they are being nickeled and dimed. It would be a better user experience and would also give MLB an incentive to up-sell their higher priced MLB.TV package. But with Apple's iTunes ecosystem, currently there is no way to grant subscribers free access to a paid app. Right now, there isn't the ability to give codes to MLB.TV subscribers during the purchase process that would make a paid app part of their subscription.

To me, this lack of flexibility in the iTunes ecosystem makes no sense and is a bad decision on Apple's part. I know someone is going to be quick to say in the comments section that it makes sense because Apple makes a lot of money from it. Or course they do, but that only makes sense to Apple's bottom line, not to consumers. And since iTunes would not exist without content partners, Apple should be working harder to make their content partners look better and provide a better user-experience.

Imagine how much flack MLB will take when some consumers realize they are paying 3x for the same content. They will complain to MLB and MLB will take all the heat when it's not even MLB's fault. Now I don't know that MLB would even consider giving MLB.TV subscribers the other apps for free, but if they did want to, they couldn't because Apple won't allow iTunes to do that. Apple has such a monopoly over content owners with iTunes that neither the consumer nor the content owner has much say in how content is purchased, consumed or played back.

Aside from the fact that Apple's new iPad won't support Flash video, how on earth could Apple design a device that forces you to keep it flat at all times? Does Apple really think people want to hold a 10" screen in front of their face, at eye level, for two hours while watching a movie? The fact you have to keep this flat, on your lap, really keeps it from being used for video applications. Not designing a built-in stand up so that you can stand up the iPad on a table is a huge design flaw on Apple's part.

While the Apple website already shows one of the cases that you will be able to buy for the iPad that also double as a stand, that functionality should be built in. With the iPhone or iPod Touch, I can understand the lack of a built in stand as the device is small and most are not using it for extended periods of time. But the whole point of the iPad is to use it for interactive applications like video and with a 10" screen, share it with others. I should not have to buy a third-party case just to be able to use the device the way it was intended, with the functionality that's needed for video.

For a company that is so smart, I'm still amazed as how Apple makes such glaring mistakes like this.

Another flaw I just noticed with the iPad is that the aspect ratio of the screen does not support 4:3 or 16:9 video. (Updated: It appears the iPad is 4:3, but still the viewing experience will suffer. See this article with images of what movies will look like on the iPad and how much black there will be) Does that mean Apple has to re-encode all of their iTunes library just for the iPad? For folks who are really serious about their video, what kind of impact is that going to have on them? While I don’t think this alone will keep anyone from buying one, it’s just another example of how Apple is hyping this device for video, yet then not thinking about video in the design process.

In a conversation with Bloomberg, Roku's CEO Anthony Wood stated that the company plans to raise $30M in private funding this quarter and wants to take the company public sometime next year. Anthony said he expects the company's revenue to double to $75M in 2010 and that the company will top the 1M units sold to date mark this year. Roku also plans to continue to cut the pricing of their Roku units, which has dropped by 30% since 2008. 

In the interview, Anthony sees the hardware as becoming less important, eventually being given away for free, with the focus really being on "subscription content". Roku has been hard at work looking to bring more content to the device and expects to have over 100 channels available by the end of this year. While Roku's goal is to earn money from subscription fees and advertising, that will only work if there are enough devices out in the market. So while the hardware does become less important over time, unless Roku plans to license their platform to non-Roku devices, the company can't expect to make much money from content and advertising any time soon.

Even with 1M devices on the market, what percentage of those customers are going to use it to get content outside of Netflix? Many will, but my guess is that a lot won't use it for any other purpose aside from Netflix streaming. So even if Roku gets a 50% adoption rate of consumers willing to view some of the other content channels, half a million eyeballs is not enough to make money from when it comes to advertising and you have to split that revenue with partners.

One other interesting note from the Bloomberg article is that Netflix has confirmed that it sold their stake in Roku to Menlo Ventures, one of the original investors in the company. Netflix says they might discuss this in more detail during today's Q4 earnings call and I'd be curious to hear their reasoning. I don't know what prompted them to sell their stake, but I wonder if the fact that new devices like PopBox are coming to the market to compete with Roku makes Netflix have to look more neutral.

Last week, rumors started circulating that Swarmcast was going out of business and had laid off all of their employees. While the company is not out of business yet, they did make some major layoffs and have changed their focus. I had a call with Christian Wilhelm over the weekend who is the chairman of the company and now runs their day-to-day operations. Christian said that at the end of December, more than 50% of the employees were let go and that about ten people still remain with the company, mostly engineers who work remotely. In addition, all of the executives are now gone, including the founder Justin Chapweske who left over a year ago, although some of the execs are still consulting to the company on a limited basis.

For anyone who followed Swarmcast, they are probably not surprised by the news. Swarmcast has been in the market since around 2002 trying to license their technology platform to enable content owners to do multi-source streaming using standard HTTP delivery. Their most well known client is MLB which has been using Swarmcast’s technology with their NexDef plugin which in 2009, allowed viewers to get HD video and features like DVR when using MLB.TV.

While Swarmcast’s Autobahn platform was unique when they launched in the market, today, multi-source HTTP streaming is the norm. Microsoft and Apple now offer this functionality and Adobe will offer support for it as well later this year. Christian said with these changes in the market, Swarmcast could not remain alive unless they changed their business model and simply had to make an “economic decision”. Instead of trying to license their platform to content owners, the company is now going to focus on trying to get their technology embedded within consumer electronic devices.

While the company will no longer have any VP roles like sales, marketing or business development, Christian said the company only needs to sign up 2-3 customers a year to stay in business. He said that Swarmcast signed two CE manufactures this month and that those two customers alone are enough revenue for the company to be profitable. While he would not say who these new customers are, he did say press releases about the deals would be announced within the next two weeks.

While the reduced head count and shift of focus to CE manufactures may allow Swarmcast to survive, I think the company is going to have a really hard time sticking around in the market with such limited resources. To date, MLB has been Swarmcast’s largest customer but last year, MLB experienced problems with their NextDef plugin which they attributed to Swarmcast’s technology. While Swarmcast denied it was a problem on their end when I interviewed them for the story last year, something Christian reinforced in our call, all that matters is whether or not MLB will use the technology for the 2010 season.

If MLB drops support, one would have to wonder if Swarmcast would be able to keep the doors open, even with the reduced headcount. Christian said MLB has a contract to use Swarmcast for the 2010 season and he does not see any reason why they would not use it, but I’ve put in a call to MLB to see if they can talk about the technology they will be using this year. I’ll update the post if they talk about it on record.

Either way, I think Swarmcast’s chances of surviving in the market as a stand-alone company are slim to none. Even if they sign up a few CE manufactures, how well can they really support them with such a small staff, no office, very few resources and no branding, marketing or exposure in the market? While the company was granted two patents for their technology, I believe their IP has simply become outdated in today’s market. I hate to say it, but I think Swarmcast’s days are numbered.

The drawing is now closed. Thanks to the generous folks over at Sorenson, I have two copies of Squeeze 6, which retails for $799, that I can give away on my blog. To enter the drawing, just leave one comment on this post with a valid email address and I'll pick two lucky winners at random on February 8th. A big thanks to Sorenson for letting me give these away on my blog. Winners: Chris K. from NY and JD Hauger from Oregon.