2007: Broadband Internet Video

I really wrestled with the terminology for this post headline. I called it IPTV initially but Ari’s comment gave me the right words. Thanks Ari.

I am talking about downloading and watching TV (I mean that broadly to include anything you’d watch today on your TV) on any internet connected device.

We are Netflix customers. Before we left on our trip to Italy, we refreshed our selections and came with six DVDs. We used them up in the first couple days between the flight over and a couple of nights where it was tough to fall asleep. So we went to iTunes and started downloading TV shows and movies. In the evenings, after dinner and before bedtime, the girls have watched the first and second seasons of Grey’s Anatomy. Josh and I have watched three movies we downloaded to my laptop via iTunes.

But I don’t think iTunes is the only model for IPTV. It’s one model and with the arrival of iTV from Apple in 2007, iTunes will be able to play on your big screen TV. That’s a big deal to some.

I think people consistently overestimate the "quality" and "screensize" issues in the IPTV debate and underestimate the issues of convenience and ubiquity of content. I have found that time and time again, ubiquitous content of poor quality wins over a narrow selection of high quality.

Last night after dinner, our whole family crowded onto the master bed in one of our two hotel rooms and watched Good Will Hunting on my 15" MacBook Pro. Nobody complained about the lack of quality or screensize. I am not saying that families are going to start throwing away their family room flat panels and replace them with MacBook Pros, but I am saying that a ton of content that used to be watched in the family room is going to be watched on other devices.

What are those devices? Desktop and laptop PCs, xBox and other game devices, PSP and other portables (maybe even smartphones). It’s exploding TV time and 2007 is going to be a breakout year.

In addition to iTunes/iTV, we are going to see The Venice Project come to fruition in 2007. It will start on Windows PCs, but I hope and expect to see a Venice client for Mac, xBox, and PSP before year end. For those of you who don’t know, The Venice Project is the next thing the guys who did Kazaa and Skype are doing. First it was music, then telcom, now TV and Film. The one thing I wonder about The Venice Project is whether they’ll be able to quickly amass a large enough catalog of content. They are working in partnership with the major content owners, an approach that hasn’t worked too well in the past for companies looking to disrupt industries.

And you cannot underestimate the power of web video (YouTube, Google Video, etc, etc). I would expect to see a number of these players adopt a client like The Venice Project and also a p2p backbone, and offer the content that is building on their networks in downloadable formats. I also expect more and more people to connect a web browser to their family room systems and start watching web video sitting around after dinner.

Finally, there is the role of feeds in all of this. When video content owners really turn on their feeds, who knows what is going to happen. I already have a number of video feeds coming into my iTunes. But I keep it limited because video feeds are a great way to fill up your hard drive really fast. But the storage issues are going to get solved soon enough. And I would bet that video distribution ten years from now is largely built on a feed based architecture.

That’s it for now. I’ve already broken my pledge to keep these posts short. I’ll be back tomorrow with another theme for 2007.

#VC & Technology