Seattle based Grid Networks, best known for enabling content owners to get web videos on their TV through the Xbox 360 and PS3 is close to finalizing a deal to be acquired. While the company would not comment about any acquisition, multiple finance folks in the industry are already talking about the deal being completed in the next week or two.

While no one is discussing who they are being acquired by, sources say the purchasing company is based in NYC and focuses on the desktop video environment. If the deal gets finalized it will be interesting to see how Grid Networks was valued and whether or not it was a fire sale. From what I'm hearing though, Grid Networks is not out of cash and to date has only taken one round of funding for $9.5M in October of 2007.

Updated 4/16: Grid Networks has merged with Global Media Services.

I have one speaking spot open at the Streaming Media East show on Wednesday, May 13 on the subject of "Automation And Workflow Solutions For Transcoding Your Video Content". I've already got three great customers on the panel, Accenture, Yahoo! and Syracuse University and am looking to add one more. Please contact me ASAP if interested.Wednesday, May 13, 2009 – 11:45 a.m. – 12:30 p.m.

Automation And Workflow Solutions For Transcoding Your Video Content
While video consumption and distribution has grown exponentially in the past few years, converting and preparing this content for the digital realm was largely a 'black art' until recently, when several enterprise-grade solutions came onto the market. In this session, we'll identify those solutions, talk to some organizations that are utilizing them, and discuss cost and benefit to enterprises large and small. From high definition to mobile, this session will talk through the hardware, software, experience and cost associated with owning and operating these new sophisticated systems.

For an entire industry that defines itself based on the word "quality", today there is still no agreed upon standard for what classifies HD quality video on the web. Both Microsoft and Adobe have different views on what classifies a video as HD and many content owners I speak don't truly know themselves how to classify HD video on the web. If the industry wants to progress with HD quality video, we're going to have to agree on a standard – and fast.

This isn't the first time I have written about the HD video problem and every time the subject comes up, you get a lot of comments from people who all have different options on how HD video should be classified. Some want the rate at which the video is encoded to be the deciding factor, others think it should be the size of the window (called aspect ratio) and some say it's the resolution that's the determines what is HD or not. While all of these examples could be the way to decide what is HD, the fact of the matter is that to date, no one has agreed upon anything. We have content owners calling videos HD that in my book, and many others, is not truly HD. Simply scaling up the aspect ratio by itself does not mean you've achieved an HD stream.

To me, the term HD should refer to and be defined only by the resolution and not by a minimum bitrate requirement. Since you could have a 1080p HD video encoded at a very low bitrate, which could result in a poor viewing experience inferior to that of a higher-bitrate video in SD resolution, the resolution and bitrate is the only way to define HD. One thing I did notice about the March Madness videos is that Microsoft and CBS are using the term "HQ" in the payer instead of HD. I think this is a smart move on their part as a way to help define what is considered high quality video, content encoded at a higher bitrate, but content that is not truly HD. It seems as if Microsoft is going out of their way to tell content owners to only call video HD if it is at least 1280 pixels wide.

Adobe on the other hand is calling 480p HD but I don't agree that 480p should be classified as an HD size for web content. If 480p is not defined as HD video quaity for the TV, why should it be for the PC? I think HD video needs to be defined using the broadcast standard of 720p, 1080i or 1080p. One thing that might make this a bit more complex is that there are more devices playing back web video than just the PC. When I download an HD show from iTunes and play it on a 50" TV, it looks great, but does not look even close to Blu-ray. Is that a fair comparison? Where do you stop comparing the quality of the video to the device it is being played back on?

It's important to remember that an industry standard needs to be created not for those in the industry but rather for viewers. Consumers don't care what codec is being used, what the bitrate is or how the video is being delivered. But they do care about quality and we can't expect them to want to adopt HD quality video when the industry itself has not even defined what HD video is.

So, what is HD quality video on the web? What is the definition and more importantly, what is it going to take to get both Microsoft and Adobe to agree to use the same standard so that content owners aren't confused? For all the competition amongst the two companies, some things need to be worked on together, with the understanding that it will help everyone in the industry if done correctly. I think Microsoft has started to do this with their definition but without Adobe and others agreeing to all use the same metrics, it's will only slow down the adoption of HD. So Microsoft, Adobe, what is it going to take for you guys to publish an agreed upon HD web video standard? We're waiting.

As the program wraps up this week for the Streaming Media East show in May, I've added speakers from Joost, Motorolla, Limewire, AP, Veoh, LG Electronics, Zillion TV, TheStreet.com and moderators from Silicon Alley Insider and All Things Digital. We've got a great lineup of almost 100 speakers, which you can see on our website.

One company missing from the list is Hulu. I've already received a bunch of e-mails from folks asking me, "How can you have an online video show and not have Hulu speaking?" I agree and I've reached out to multiple people at Hulu but haven't gotten any e-mails or calls returned. In fact, I think it's so important to have Hulu at the show that I even offered them a keynote speaking spot, in front of a crowd that's usually 500 strong. So if someone from Hulu is reading this and wants to be involved, please get a hold of me right away, we'd like to have you represented. But the program is closing this week and being sent to the printer so there's not a lot of time left.

I am closing out the Streaming Media East program this week and have a few spots that have opened up that I need to fill. Today I am looking for at least one and maybe two speakers for a session entitled:

Successful Content Syndication and Aggregation Strategies
This panel will discuss the new ways content owners and site developers are aggregating content and distributing it on the web. See examples of ways to develop niche vertical sites without significantly expanding staffing, and discuss how to reach audiences on social networking sites like Facebook. Learn about some of the new emerging platforms for niche video distribution and best practices for increasing your chances of making money with your content.

The panel takes place on Tuesday May 12, 2009 from 4-5pm. While I am open to all speaking requests, ideally I am looking to fill the spots with content owners, those who are syndicating their content across multiple platforms. If interested, please contact me ASAP.

Neil Hunt, Netflix's chief product officer posted to the Netflix blog earlier today that the problems some users are facing with Netflix's streaming service is as a result of how ISPs handle traffic and is in no way an indication that Netflix is throttling their service. This should not come as a surprise to anyone who's in the industry as the idea of Netflix throttling their own service on purpose simply lacks common sense.

Not to mention, this whole issue isn’t even debatable since Netflix is not the delivery network pushing out the streams and has no control over any network. They don’t serve the streams, Limelight and Level 3 do. How can Netflix “throttle” something they aren’t delivering?

This whole debate started on the Break It Down Blog when the author was complaining that the quality on the Xbox 360 is much better than the watch now service on the PC. Of course it is, that’s because content for the Xbox 360 is encoded at higher bitrates, which Netflix already disclosed on their blog back in November and which Neil re-confirms in his blog post today.

The author on the Break It Down Blog may very well be having issues with streaming to his PC, but it’s not as a result of Netflix doing anything as many people pointed out in the comments section. Not to mention, Netflix is all about keeping customers happy. Why would they make anyone's viewing experience crappy on purpose? Neil's post today did say that Netflix is looking to improve the streaming experience in general by, "incorporating an initial version of multi-sourcing, and as we improve it, we’ll roll it out to everyone including our device partners such as Roku and Xbox. We hope by the end of year to have this problem largely solved."

Hopefully this ends the debate about whether some Netflix users think Netflix is throttling their streams and intentionally providing them with a poor video experience. Some users are going to have problems with streaming, but it's not isolated to Netflix. They would have the same or similar problems with other high-bitrate content as well.

Yesterday, Apple announced that shortly they will start selling HD quality movies for download from the iTunes store. While it sounds like a great idea, the business model is completely flawed and clearly the movie studios are living in a bubble. As I have mentioned in the past, how on earth can the studios continue to charge more for a digital download than a physical DVD?

I really don't get the thinking from the studios when they think they can make a business model out of charging $19.99 to download Quantum of Solace from iTunes when the average price to buy the physical DVD, from retailers like Amazon, is $16.99.

With digital downloads, studios don't have to pay to produce the DVD or any of the packaging. The bandwidth cost to download a two hour movie costs pennies and online promotion of digital content is a lot less expensive than other forms of marketing. Yet even with all those savings, the studios charge more for digital downloads. While one could say this is an iTunes issue, it's not. Looking at CinemaNow or any of the other online movie services and you'll see that digital movies cost between $3-$5 more than buying the actual DVD.

Why is no one questioning this? How can this be the future business model for the online consumption of entertainment? Many of us have waited a long time to get to the point we are at today
with broadband connections capable of getting movies and having
multiple devices to play them back on. Yet even with all the progress
we have made, studios will keep the business models from being
successful. Part of me really wants to see all the studios fail just so they learn their lesson. I know it would not be good for the online video industry but studios continue to run their business on one simple principle – greed.