Verizon announced they are launching their own content delivery network (CDN) to “distribute content that Verizon contracts for directly with content owners like movie studios, TV networks, video rental sites and entertainment services…” The CDN is being phased in through a business relationship with Velocix, a U.K.-based digital asset-delivery network provider. Velocix will provide CDN services utilizing p2p technology to Verizon. "Verizon is now positioned to offer content owners and video distributors a competitive choice in delivering their services to our broadband customers," said Marjorie Hsu, Verizon vice president for network technology. "With our new delivery capability, content owners will be drawn to our networks, and our customers will be the beneficiaries of a broad range of compelling content services."

Verizon joins an increasingly crowded CDN landscape. CDN’s are growing as broadband and high capacity network owners aim to leverage their core networks for the growing business of content delivery to a plethora of network connected devices. By creating their own CDN capability, Verizon and others eliminate the need of contracting with other transport networks to distribute content, thus hopefully increasing margins. Companies like Verizon may be attractive to content owners, because in addition to robust CDNs, they also offer millions of existing broadband customer relationships. The first example of this Verizon collaboration is Starz Entertainment's Starz Play broadband entertainment service, which “provides unlimited online subscription access to more than 2,500 movies and video selections on demand, in addition to a live stream of the Starz premium pay TV movie channel.” It’s yet another example of broadband service providers trying to leverage core strengths for competitive advantage.

ORLANDO (November 17, 2008) – Bright House Networks today announces a significant expansion of its Video On Demand (VOD) services with the launch of a new online destination where consumers can download to own or rent thousands of titles from Hollywood studios and across many cable and television networks. The online video store service, entitled Road Runner Video Store, is available at http://videostore.rr.com. Read More ...

Dallas, Texas, November 10, 2008 - AT&T Inc. (NYSE:T) today announced the public beta of VideoCrawler (www.videocrawler.com), an innovative new Web application designed to provide a better way for people to search for, organize and share online videos and other multimedia content. Developed in collaboration with Divvio, VideoCrawler indexes hundreds of millions of video clips from thousands of sites, with new sites and millions of clips added every day. Enter a search term and you'll receive consolidated results from across this vast index. From there, you can organize your favorites into collections, which you can choose to keep private or share with others via the VideoCrawler site or social networking widgets. Read More ...

Verizon and the NFL announced the continuation of their broadband partnership, which brings NFL Network games to Verizon’s broadband customers. Verizon initially offered this service during the NFL pre-season. The games are available online to customers who subscribe to both Verizon broadband service (FiOS or DSL) and Verizon TV service (FiOS or DirecTV). NFL Network Game Extra features include the ability to choose from multiple camera angles, chat features, a game statistics feed, and on demand video highlights. I would imagine that many users of this service will probably watch both – watch the game on TV, while simultaneously interacting with the broadband version to take advantage of the features it provides. Recent research from Nielsen Media reveals that online video viewing often occurs simultaneously with television viewing (check out my Light Reading blog post on this issue). This service seems ideal for that scenario.

NFL Network Game Extra is a great example of a value added differentiated service. It’s exclusive to Verizon customers, creating an element of competitive advantage. One problem though. I’m a Verizon FiOS customer, with both TV and Internet service. I’m the ideal customer for this type of feature, and would value it greatly. Yet I haven’t received any communication from Verizon notifying me of it. The only reason I know about it is because of my role as an industry analyst and blogger. I called two friends who also are huge sports fans and subscribe to Verizon Internet and TV – neither knew about this service, which started today. What good is a value add service if you can’t even communicate its existence to the very customers who would probably value it the most?

New research by the Conference Board reveals that TV viewership online has nearly doubled since 2006, with nearly one-fifth of Internet homes watching TV online. According to the research, associated television channel websites and YouTube are the most popular destinations for these viewers. "Being able to watch broadcasts on their own time and at their convenience are clearly reasons why we are seeing a greater number turning to the Internet. And, it is the reason why we would expect to see this trend continue,” says Lynn Franco, Director of The Conference Board Consumer Research Center. Other interesting findings from the study include:

• Among online viewers, 43% watch news, 39% watch drama, 34% watch sitcoms, 23% watch reality shows, 16% watch sports, and 15% watch user-generated content
• Among the online viewers, 90% watch online broadcasts at home, 15% in the office, and 6% in other locations

Some of these findings are a little surprising to me. I guess I expected higher numbers. Reading this data makes me feel that all of the predictions of traditional television’s demise at the expense of the Internet are premature. The news is good for programmers, because their websites are the most popular destinations, meaning regardless of the method of distribution, they seem to be maintaining a relationship with viewers. Will that prompt them to try to bypass their distribution partners, including DBS, cable, and telcoTV?

Microsoft announced today at the E3 Expo that Xbox 360 Gold members will be able to download movies from Netflix to their game console (and hence their TV) for no additional charge. Subscribers also have to be Netflix subscribers. Netflix makes about 10,000 titles, which includes movies and television shows, available for direct download. The move continues the trend by Microsoft to position the Xbox 360 game console as an entertainment gateway, featuring gaming, video downloading, music, and social networking applications. The new Netflix feature will be available this fall. Microsoft competitor, Sony announced earlier this month that they are bringing video download options to the Playstation 3.

Sony is flexing its vertically integrated muscle with news today that it’s going to begin providing first access to its blockbuster movies to users of their consumer electronic devices. Playstation 3 and Sony Bravia TVs will be the first products to receive downloaded video capabilities. The idea of downloading movies to game consoles and televisions is nothing new. But Sony is raising the ante significantly by giving their devices first access to Sony produced movies – ahead of DVD, VOD, and cable, DBS, and IPTV distribution. Sony announced the movie Hancock, starring Will Smith, will be the first movie to get this early release treatment.

The move is indicative of the fast moving digital media ecosystem and its impact on the competitive landscape. By being both a producer of content and of consumer electronic devices, Sony is exploring cutting out the distribution middle man with this strategy. They have their devices in millions of homes throughout the world. As those devices become Internet enabled, Sony has the ability to reach their customers directly, build a more robust relationship with them, and conceivably, extract more revenue from them. From a broadband carrier’s point of view, this move should be of interest on a couple fronts. Broadband carriers are increasingly distributors of digital media, and certainly don’t appreciate being bypassed. Additionally, the broadband carrier’s network is what allows companies like Sony to reach customers directly through the Internet. If this bypass trend builds enough momentum to have a material impact on a broadband carrier’s ability to grow their own revenue through the distribution of content, something will have to give. Call it net neutrality or something else, but I don’t see broadband carriers just sitting idly by, while their content distribution business dies on the vine. They control the pipes into the home. To some extent, that gives them a trump card. This issue will be one to watch.

Time Warner Cable will officially begin their previously announced broadband bandwidth cap trial in Beaumont, TX this week. Time Warner tells the Associated Press that on average, 5% of their subscribers account for 50% of the bandwidth consumption. Depending on the tier selected, customers will have a cap on the total amount of bandwidth they can use each month, measured by both download and upload traffic. If they exceed their designated bandwidth cap, they will be charged at the rate of $1/Gigabyte per month. Kevin Leddy, Time Warner Cable's executive vice president of advanced technology tells the Associated Press, "We think it's the fairest way to finance the needed investment in the infrastructure."

Of course, there are different viewpoints about Time Warner's real motivation. Could it be an attempt to discourage customers from using competing services for video content? Video is the most intensive broadband bandwidth hog today. A full length high definition movie downloaded over the Internet can equate to 6 gigabytes of data. Considering alternative sources for video consumption are flourishing on the Internet, a conspiracy minded theorist could easily draw the conclusion that Time Warner wants to make it a little more expensive for customers to enjoy these competitive offerings. Netflix, Amazon, and others are pursuing direct to consumer movie download services. Other services including Hulu and Joost aim to offer a compelling mix of video content for Internet download. Quite candidly, the day when consumers can choose to forgo a traditional subscription video model in favor of an Internet only video content delivery option is quickly approaching (if it's not already here). The video below reveals Time Warner Cable's CEO Glenn Britt's view of the spin off of Time Warner Cable from their parent company Time Warner, as well as his take on the impact of Internet video on the cable business.

Is Time Warner trying to slow the trend of Internet video from taking hold by making it more costly for their broadband subscribers? Perhaps. But issues like this are rarely that simple. The reality is probably a little more complex, involving network efficiency and optimization strategies, as well as implementing an element of fairness to broadband availability. After all, it's not an unlimited resource. Why shouldn't the bandwidth hogs pay more? Making customers pay for the bandwidth they actually use isn't exactly anarchy. It's a model that consumers are used to in other areas including, electricity, water, and transportation. Should bandwidth be different?

Verizon announced the launch of Starz Play, an online video distribution service of Starz Entertainment. Verizon will make the Internet delivered video service available to its 8.5 million broadband subscribers. Starz Play is a subscription-based, video download service for delivering movies and other video content over the Internet. It offers a wide variety of first-run hit movies, movie classics, and other content options. Verizon subscribers can access the service anywhere in the United States to watch live Starz programming and to download and view movies and videos an unlimited number of times at no additional charge. The Verizon Starz Play subscription will be offered at $5.99/month for up to three approved Internet connected devices.

Akimbo, an Internet video-on-demand service provider is no more. They’ve made it to TechCrunch’s dreaded Deadpool. It’s somewhat of a puzzling development, since Akimbo raised $56 million just three months ago. Akimbo had shifted their business model to a “white label” provider of Internet VOD. CenturyTel recently launched an Internet VOD product, powered by Akimbo. Akimbo was also featured in AT&T’s Homezone product. Akimbo’s demise gives Internet VOD somewhat of a blackeye. They originally started as a hardware provider, offering VOD set-top-boxes. They then shifted to a Internet only model, and their last iteration before death was a “white label” provider. Is there an Internet VOD model that works, because it looks like Akimbo tried them all?