Daily Media allows new players into the IPTV market

When you ask "can it it do x?", the answer will either be "yes" or "no, but it could - easily".
That's one way to describe the new Daily Media box.

Last week, two of United Content Distributors' executives came to my home for a private demo of their newest box. And I have to say I was impressed. Hennie Meijndert is their CEO and behind much of the technology. John Goedegebuure is taking care of PR, now that the Daily Media product is ready for commercial launch.

Basically, the box provides place-shifting in that it allows for a full-blown TV experience of internet-based content. In that respect it resembles both Apple TV, Microsoft and Sony products, as well as TiVo, Akimbo (the original box) and Orb. But it offers a whole lot more, especially to distribution partners. Typically, these could be operators (CATV, DTT, telcos, munifiber) as well as 'service providers' in the widest possible sense (ranging from insurance companies to the post office) - as long as they have some form of customer relationship because UCD doesn't plan to become a service providers itself. Partners will be able to share in (targeted) ad revenues, VoD fees and other fees. And more.

Openness, partnering and revenue sharing are at the heart of the company and it's business model. In that respect, it has telco 2.0 written all over itself. It offers traditional and web 2.0 based video content, enhanced with highly targeted ads.

The specs (also, check out this .ppt that I made available as a Google Presentation):

• United Content Distributors has been working on the Daily Media box for 4 years, with 16 employees (developers and sales). CEO is Hennie Meijndert.
• Funding is private so far, coming from the shareholders: the CEO and his partner.
• Daily Media is a box for connecting a range of input sources (currently >500 channels through web feeds, beside CATV channels) to the TV. Also, all media content available in the home can be converged into the platform. As the box is portable, it can even mimic Sling-like capabilities.
• Video is streamed at 540 kb/s.
• Manufacturing cost: EUR 150 (excluding several relatively cheap add-ons, such as a PLC adaptor, cables, web-cam, microphone, possibly a DTT-tuner, etc.).
• Proprietary are the hardware specifications and the OS running on the box (albeit based on Windows CE). Further, two programs are server-based (for updates and the UI).
• Upon receipt the customer receives a EUR 240 credit at LaSer Nederland/VISA for buying content (VoD) and services. After registration it is raised to EUR 1,000.
• The company does not aim to be a service provider and instead relies on third party distributors. Their role is to subsidise the box and subsequently share in the revenues.
• The business model is centered on revenue sharing with both upstream (content providers, advertisers) and downstream (operators) partners. Sources of income are fees (VoD, t-commerce and other servies) and advertising (skyscrapers and video on the menu pages; commercialised slides during buffering; inserts; etc.).

Here are the benefits to each party in the ecosystem:

For consumers:

• A wide range of content, including web feeds of traditional TV channels, with a heavy focus on long-tail content (e.g. a Brazilian soccer channel).
• Access to the internet, so no walled garden.
• Movies (VoD, running quite well on an astonishing 540 kb/s, or 800 kb/s for somewhat better quality), with a single-click payment system (through the LaSer Nederland/VISA deal), connected to a maximum EUR 1,000 credit against which payments are debited – nice for impulse buying.
• VoIP (an SIP-based home grown solution) for box-to-box communication.
• Services including a 'red button' on screen for t-commerce and potentially domotica.
• Uploading personal content (audio, photo, video), with a free of charge 2 GB of personal storage.
• Plug-and-play installation with a single remote control, a wireless keyboard for web surfing, a webcam and a headset and PLC-based plugs that allow you to hook up anywhere in your home.

For content providers:

• Yet another platform to sell your wares.
• Daily Media picks up free web feeds, but adds pay-TV channels to make the offering more compelling.
• Also, it has a VoD agreement in place with which it has a very narrow distribution window (sometimes movies can be seen just days after they become available for rental).
• New revenue streams from interactivity (purchases through a single click on the red button on enhanced programs) and highly targeted ads (IP addresses and subscriber data can be combined, so CPMs in theory must be relatively high).

For operator partners:

• The solution to your quest for content, with the added benefit of raking in advertising euros, VoD and other fees, and solidifying your customer relationship.

For other distribution partners:

• Same as for operator partners, and add to that the option of having your brand and access to your services on the personalised home page of each individual user. This adds a line of communication to your subscribers. Providing 'hot news' may even alleviate your help desk (in case the partner is a health insurer, e.g.).

Obviously, there are a number of obstacles for UCD and its Daily Media box:

• Picture quality. At a 540 kb/s bit rate, the offering is quite astounding. However, the audience will adopt HD and get used to much more over the coming years. It remains to be seen if Daily media can keep up in this arms race.
• Dependence on web feeds implies that the server of any content provider may crash. Obviously, this is an area in flux. The service is dependent on third parties and you can only hope/assume that capacity is added, and deals with CDN operators such as Akamai and Limelight are scored.
• Funding. Four years and 16 employees implies considerable investments have been made by the current shareholders. Going to the next stage can be achieved through organic growth, but can also be expedited if the company were to attract additional funding. I have been shown some very interesting innovative financing methods.
• Yet another box. STBs and the boxes of even a company like Apple have a hard time making it to the living room. Sure, UCD adds interesting deals for partners, as well as a wide range of content and services, but still ... What helps is that the Daily Media remote can also be used to control the already existing audio/video hardware in the living room, so "one box in and 2,3 or 4 remote controls out".
• Focus. Perhaps the box can do a little too much to make it sellable?
• Exclusivity. Any distribution deal may alienate other potential partners in a specific geographical market. The same would apply if the company would sell itself to KPN, to its erstwhile Siamese twin TNT or to a large retail banking group - to name a few thinkable options.

To round off, here is what I particularly like:

• The box promises to be truly plug & play and converges several other boxes and remote controls.
• Low cost for consumers and operator partners. This is basically the result of distribution partners and advertisers coming on board, taking a big chunk of the cost.
• There are no regional boundaries. Daily Media could be sold anywhere, provided they have a distribution partner.
• New operators such as Reggefiber or bbned/Alice (both involved in FTTH in the Netherlands) could team with UCD to extend their content offering. This would raise their chance of winning against entrenched cable operators.
• KPN could forgo the development of its ill-fated IPTV offering and simply quit that game altogether. Instead, a Daily Media box with DTT tuner could allow KPN to offer basic TV and some pay-TV of Digitenne (at the highest available quality), enhanced with all the Daily Media stuff (which has a somewhat lower picture quality). In fact, an alternative could be to accept CATV channels to enter the box too (outside the network or commercial reach of Digitenne). KPN could look at that as a form of traffic off-loading – comparable to what femtocells do for mobile-only operators (in-home traffic off-loaded to the subscriber’s broadband connection). Another possibility may be to deploy Daily Media in a closed setting, to improve its performance (in terms of picture quality and stability).
• CATV operators could integrate their STB in the Daily Media box (or vice versa). A single box and a single remote control would be great for consumers.