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vudu.jpgOver the weekend, The New York Times was granted an exclusive look at the prospects for Vudu, which appears to be a sort of improved AppleTV for downloading movies, but with upscaled high-definition, a P2P back-end for quick downloads, and licensed content from the studios.

We've obviously put in a request for an interview, but so far the company has said that it won't comment. So let's gather what we've learned so far, then talk about some of the questions this box will have to answer before it can succeed in the market:



Not surprisingly, the company's operated in stealth mode for the last few years. Both the VP of engineering and the chief operating officer are from TiVo. That's a good sign. TiVo's are now the Kleenex of PVRs (probably the best in a market that can make do with cheaper, generic knockoffs) but they invented the category along with ReplayTV, and do many things right.

The Vudu box (Times' guess on price: about $300) uses peer-to-peer technology, caching some of the content on other Vudu boxes. The idea is that this cached "neighbor" content (my word, not theirs) allows the movie or TV show to instantly start playing. Unlike the AppleTV, the content down the pipe is HD, although it's upscaled from MPEG-4. Movies and other content have been licensed from "every major studio -- except, for now, Sony Pictures Entertainment -- and 15 smaller ones."

I've always been interested by products which affect society, such as the cell phone and the DVR, or TiVo. Video on demand has been around for years, but it's been restricted to just a few movies and events. This has the potential of pushing this market forward into the mainstream.

To do so, however, Vudu needs to solve several problems:

  • Upstream bandwidth, provider level: The monkey on this technology's back. As we've reported on previously, Comcast and others have "floating," undisclosed bandwidth caps as part of their Acceptable Use Policies. This basically means that unless you've downloaded a download meter to track your utilized bandwidth, and troll through the Web to find anecdotal reports of how many gigabytes of throughput got a particular user banned, you'll always live in fear that your licensed, absolutely authorized use of broadband will end up terminating your ISP account. That's not Vudu's problem, that's the ISP's problem. But it is a problem, and a big one.

  • Upstream bandwidth, user level: Anyone who has ever used peer-to-peer applications (or even tried to email a large attachment) knows that the download bandwidth far outstrips the upstream bandwidth. More to the point, performing either activity monopolizes your Internet bandwidth, to the point that VOIP applications become garbled, and surfing the Web is noticeably slower.

    Under this model, we can speculate that a portion of the upstream bandwidth (all of it?) will (probably) always be dedicated to streaming movies, not only impacting your usage allowance (see above) but impacting your other services. As a commenter on Slashdot pointed out, demand for quality-of-service (QoS) routers could spike. The comment, "Vudu sucks -- when it's on, you can't do anything else" will kill this, fast.

  • Price: Another question mark. A box price of $300 or so isn't a problem, although consumers used to subsidized DVRs (and thus a single set-top box) might balk. Per-movie pricing and availability is going to be another big question. Do consumers view watching a movie at home as a premium experience, or as a lower-priced alternative to the movie theater? And if the theaters continue holding movies for digital VOD/DVD/Vudu release until after a window of a few months, is there still a premium?

  • The high-def dilemma: AppleTV lacks high-def, and it's taken heat for it. Vudu upscales its video into high-def from an MPEG-4 source. To what resolution? Another big question, and one that will definitely have an impact on the price, as well as determining the quality of the experience.

  • Ownership: Last but not least, will consumers be granted any rights to the content? A downloaded movie apparently won't be stored on the box; will consumers nevertheless "own" the content, to be reviewed as they wish? Anyone who has watched children devour their favorite movie or TV show over and over will understand. And if a viewer doesn't own this content, what will prevent the studios from instituting "subscriptions" to a particular movie, or forcing consumers to pay again and again for a particular piece of content? This is perhaps the most fundamental question of all, and one that will have to be answered (or spun) satisfactorily to satisfy not just the American consumer, but the American geek.

There are other, more minor issues, such as region (not just launching Vudu overseas, but bringing foreign content to American Vudus) as well as multiroom setups. (Home distribution via wireless? Unlikely). Here's hoping that Vudu has thought these questions through. Otherwise, it will just be another ambitious entry on a long list of semi-successful but ultimately failing attempts to distribute content around the home.

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Posted by: Jennifer
April 30, 2007 2:20 PM

I don't see why "upscaled" video is any better than what Apple offers. It's not true HD either way.

Isn't that what the Apple TV does?

Bandwidth caps is definitely something that kill this (or Joost) pretty quickly. I think that's the big story -- will the cable companies and telco's step in and try to stop customer erosion by capping bandwidth? I'm afraid they might. It's the biggest threat to P2P as an option for "Over the Top" delivery (as Shelly Palmer calls it.)

Vudu. Apple TV. Joost. TiVo. The battle is on.

Jennifer


Posted by: Steve
April 30, 2007 7:26 PM

I hope their business plan doesn't actually depend on selling "yet another" box into everyone's living room. Since it's P2P, they clearly need a lot of "peers" in the field to make this succeed, but I would hope that ultimately they will just license their technology to (for example) TiVo. I'm sure I'm not the only one who would rather just have my existing (and perfectly capable) Series 3 TiVo box provide this functionality...


Posted by: Tony Brunner
April 30, 2007 9:28 PM

Man $300 USD for a standard definition set top box, what a joke! high definition streaming... this is the way to go. Download is dead on PC and STB. I love sites like MyTVPAL.COM. They do 1080p streaming content over low bandwidth over PC Player and set top box for TV. Long live high definition 1080p streaming!!!


Posted by: Mark
May 1, 2007 1:54 PM

As far as P2P is concerned, I suppose I should have pointed out two things: one, the peering is enforced, given that apparently a partition will reside on a user's hard drive which will store bits of other movies. Second, BitTorrent.com (which is trying to adapt tis technology to a legitimate business model) keeps a persistent seed online 24/7. Anyone who then chooses to seed is a bonus.


Posted by: john
May 2, 2007 9:49 AM

OK. So, I can get a lot more movies fast. That's great. But, what's getting my attention these days are the shows, video blogs, etc. that I'm getting on my PC through streaming and bittorrent. I don't think I'm alone in thinking that the future of video lies in making available the 90% of material that only 10% of the audience cares about (but cares about passionately) onto a tv screen fast and cheap.

P.S. It's going to take alot of convincing for me to believe that this box isn't going to have a big and negative impact on the performance of the other networked devices in my house.


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