I wanted to pass along the sad news that Ezra Davidson, former co-founder of SyncCast and a previous writer for StreamingMedia.com passed away over the New Year’s holiday. Sadly, he was killed by a family member who the LA Times is reporting is being charged with his death.

Ezra was a long time veteran of the online video industry and co-founded SyncCast in 1998 which he departed in 2007 when it was sold to Technicolor. While I never got to know Ezra on a personal level, through our business relationship he was a friendly guy who was always excited to talk about the online video industry. Every time I saw him at a Streaming Media show he was always laughing and had a smile on his face.

Some of his friends have put up a memorial website with more details on Ezra’s background and photos of Ezra with some of his colleagues.

Updated: The family welcomes all those who knew Ezra if they want to attend the service. 10:30 AM, Saturday January 10, 2009, Memory Chapel, Forrest Lawn, 21300 Via Verde Drive, Covina, CA 91724

Updated March 2010: Phillips Ranch woman gets 50 years to life for husband’s killing

As the CES show in Vegas kicks off this week, the buzz and announcements around broadband enabled TVs is starting to heat up. Netflix and LG announced that come later this spring, a new line of broadband enabled LCD and plasma TVs will be capable of streaming content from Netflix without the need for any type of external box. While this is not the first broadband enabled TV that will be capable of streaming content, both Panasonic and Sony already have models, it is the first TV manufacturer deal for Netflix.

The CES show also brought announcements from Adobe and Intel who are looking to bring Flash to Intel's Media Processor CE 3100, which Intel hopes will be used to bring web content to digital TVs before mid-2009. In addition, Intel plans to announce with Yahoo! support from TV manufacturers to sell sets that come with widgets that allow you to watch web content on your TV using the TV's remote control.

While the idea of broadband enabled TVs sounds like a great idea and catalyst for helping to bring more IP video directly to the TV set, the reality is that these devices won't have any major impact on the industry for many years to come. The poor economy has killed the sales growth of new TV sets, let alone new LCD and plasma displays like LG's where the broadband enabled versions cost an estimated $300 more than ones without the functionality.

But of course, that's not stopping the companies building these sets and analysts to say things like, "I think this will be a big, growing sub category in TV" or "Streaming video from the Internet and other means of direct digital delivery are going to put optical formats out of business entirely over the next few years.” It all sounds nice, but it's wishful thinking on their part, especially the idea that broadband enabled TVs and streaming will make the DVD obsolete in a few years time. The real question is how quickly will these new sets be adopted when Netflix says that most research data shows that the average consumer holds onto their TV set for at least a decade?

Parks Associates predicts that by 2012, about 3.6 million broadband enabled sets will be sold in the U.S., or about 14% of total new TV sales. If those numbers are accurate, three and half million sets in three years is not a very big impact on the market considering devices like the Xbox 360 and PS3 sell that many devices in one or two quarters alone.

Broadband enabled TVs could be the future, but the impact they have on the market will not be felt in any major way in the next three years. And while most in the industry are talking hardware, the real question in my mind is what the user interface is going to look like that allows viewers to find and control how they get web content to their TV set? The software layer is going to be the most important factor in the success of broadband enabled TVs and not the actual hardware itself. Building added hardware functionality into a TV set it the easy part, providing the software overlay that will control and operate the new user experience is where the real challenge comes in.

Amazon just announced that in "early 2009" they will enable more than 40,000 commercial-free movies and television shows to be viewed with the Roku player. This marks the first new content partner for the Roku device which to date, was only capable of playing content from Netflix.

While the release states that all content will be encoded with H.264 and streamed up to 1.2Mbps, it sounds like HD quality content from Amazon won't yet be offered on the Roku, even though the Roku box is capable of getting HD quality streams.

While it's good to see Roku start to add more content partners, I think they need to add a lot of video content that you can't already get on your TiVo, Xbox 360 or PS3. While most seem to be focusing on the mainstream content offered by Netflix and Amazon, I think that much of the content outside of the mainstream movies is really what would make the Roku box even more interesting. Especially since that for only $100 more than a Roku, you can now get an Xbox 360 and do more than just stream movies.

Today, Malaysia based Aflexi is pre-launching a new CDN platform targeting web hosting providers and small ISPs who want to enable CDN services across their network. The service is very similar in theory to Velocix's Metro service that was launched last month, but without much of the scale, functionality and support that Velocix is offering.

While the idea of trying to build a network of networks for video delivery is not new, the execution is very difficult and the service only has a shot at making it if enough ISPs and hosting providers sign up to use the platform. Aflexi is selling their platform for $150 a month to hosting providers which enables them to deploy unlimited copies of Aflexi's server software and will be charging ISPs a higher, yet disclosed rate. Clearly Aflexi is not going to make any revenue with that type of pricing model and instead charges hosters and ISPs a "royalty" of just under one cent per GB delivered, based on the volume of traffic they push.

While the concept is an interesting one, the Aflexi platform is missing a lot of functionality and the company is just a handful of folks with no marketing or sales force. Aflexi's strategy is to leverage the co-location and hosting providers resources to sell the service to content owners. The platform does not support Flash, does not come with a SLA and has no ecosystem tools, amongst a host of other much needed functionality. Aflexi is targeting to sign up 20 small ISPs and hosting providers by the end of the year.

While I don't see Aflexi making any major impact on the market anytime soon, CDNs are going to need to develop a software layer to handle the many different pieces of the video ecosystem. And with the number of CDNs that continue to flood into the market, it's only a matter of time before someone starts developing software overlays for CDNs.

During the holidays, on December 29th, the Judge denied Limelight's motion for a summary judgment in their patent suit with Level 3 and stated the case will still go to trial. If you want to get a good overview of the patents in dispute, without too much legal mumbo jumbo, the summary judgment document details what's being argued by both sides.

In other patent suit news, while it was expected that the Judge in the Akamai and Limelight case would issue a ruling before the New Year, no ruling has yet to come out. When it does, I will post it as soon as I get a copy of it.

As expected, this morning Roku announced that the Roku player is now capable of playing hundreds of HD quality movies from Netflix. While my Roku player got the software update over the weekend, Roku says all players will be updated over the next few weeks. In addition to the new 720p HD support, the new Roku software upgrade also allows for up
scaling of SD titles to 720p and enables Roku's switch to the new VC-1 AP
streams, which previously used to be VC1-MP. The switch to the new encoding gives similar or
better quality for lower bit rates. Roku's HD quality videos are now encoded at 2.7Mbps and 3.8Mbps.

While it is great to see HD quality content from Roku, I have to worry about the impact that HD quality video is going to have on Netflix's operating costs. Between the Xbox 360, TiVo, Roku and other devices capable of streaming HD quality video, Netflix is spending more money each month to deliver all of this content. And as more content is made available in HD, that delivery cost to Netflix only continues to grow each month. Even with the economics of scale kicking in and Netflix getting a lower price due to increased traffic, their overall cost continues to go up as the business scales.

While Netflix is betting that in the future they will be able to show revenue from delivering movies online, they don't have an unlimited window of time to prove this. I think sometime next year they are going to have to outline what their online video business model could potentially look like going forward, how they plan to generate revenue or how this offering might help offset other costs associated with their traditional DVD business.

Over the weekend I got to read through the Markman order that was issued on December 10th in the Level 3 and Limelight Networks patent suit. While a Markman hearing typically does not bring a lot of surprises, there were some interesting details about the suit that came to light from the ruling.

The case was reassigned to a new Judge on September 17th of this year
and it is interesting, but not surprising, that the Judge was not
familiar with the technology being discussed. In fact, he even thanked
both parties saying that the materials they submitted and the technical
explanations provided "were all extremely helpful in
educating the Court about the nature of the technology at issue in this
case." While the lack of technical knowledge by the Judge probably surprises no one, you'd think the court would try to assign the case to someone that has some previous experience with what is being discussed.

Level 3 and Limelight were originally in dispute over twenty two terms but came to agreement on four terms (Subscriber, Resource, URL, Default Path) leaving the court to rule on eighteen terms. The rest of the claim constructions in dispute were in reference to Level 3's 807 and 935 patents, which combined have 66 claims and make for some long reading. So if you want the details on each patent, hit the links for the filings.

The eighteen terms in dispute were Origin Server, Repeater Server, Repeater Server Network, Name, Rejecting the Client Request, Client Request for a Resource, Appropriate Repeater Server, Repeater Selector Mechanism, Subscriber Verifying Mechanism, Embedded, Handled, Obtaining a Client Request, Determining, Alternative/Alternate Path, Destination, Overlay Node, Dynamic Router and Real-time Traffic Information. 

For eleven of the terms, the Judge ruled in favor of Level 3's definition and for the other seven terms, the Judge used a combination of Level 3 and Limelight's definition and/or suggestions from the Court expert, Dr. Zegura, to create his own definition. The fact Limelight did not win any of the claims outright is really not surprising since typically the Plaintiff tries to assert very wide claims while the Defendant tries to narrow down the scope of the meaning. Some of Limelight's proposed definitions were too over reaching and some of Level 3's definitions were too broad and "technically correct but insufficiently descriptive."

There was one instance where Level 3 suggested to the Court that it should adopt its ruling on the definition of "Alternative/Alternate Path" because it was the agreed upon construction in the Cable & Wireless and Akamai suit. The Court didn't agree with the argument saying that "Akamai Technologies is a competitor of both Plaintiff and Defendant and a non-party to the instance case."

Overall, I think both sides got some of their definitions well established and while most would probably say that Level 3 did better, I don't think anyone truly knows if that is true until the case goes to court and we see what phrases and definitions are most important in the case. We can expect that to happen sometime next year.

Note: While I have worked as an expert on multiple patent suits, I have never worked on any patent suit involving any content delivery network.