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ZeeVee's Localcasting Solution Merges Internet, TV

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October 09, 2008

ZeeVee's Localcasting Solution Merges Internet, TV

By Rich Tehrani, CEO, Technology Marketing Corporation

As the convergence of television and the Internet continues, there is still a basic challenge in finding a simple way to connect the massive stores of Internet video content seamlessly with traditional television. There are a number of devices which tackle this problem but none I've seen seem to have the momentum to become mainstream. The marriage of the Internet and TV is a huge opportunity and if done correctly, it will change numerous industries.

Recently, I heard from old friend Brian Mahony (pictured), the VP of marketing at localcasting (in-home broadcasting) company ZeeVee. Mahony has worked at a number of companies on the cutting edge of technology in the decade in a half or so since I have known him. When I met him in the nineties, he was working for Tundo - one of the first IP PBX (News - Alert) companies which like so many others, ran out of funding during the dotcom/telecom meltdown. He then worked for a number of IPTV companies including Espial and Netcentrex (News - Alert), which was eventually acquired by Comverse Technology.
Now, at ZeeVee, Mahony is about as full of energy as I have ever heard him and he seems to be revved up by the opportunity in front of his company, which is becoming the defacto way to broadcast Internet-based HD content to all televisions in a home.
What ZeeVee does, which is different from other approaches, is eliminate the premise that a standalone TV box is the answer. In other words, it does away with the notion that you need an Internet-connected box on all the TVs in the house. In addition, the company does away with the notion that the standalone box should be a computer. In fact, instead of putting a computer in a box and connecting it to the Internet, the company's ZvBox connects to a PC in the house and broadcasts HDTV Internet video content throughout the home's cable TV cabling. Thus, the term localcasting.
Once connected, the user sits in front of the TV with an RF-based remote control and watches virtually any Internet-based video content. In addition, the customer can use the box to watch locally stored movies and DVDs. This gets us to the next point which is elimination of what Mahony refers to as the 'digital octopus' (pictured). 

This refers to the tangle of wires and devices which live near your television. Mahony further explains that new televisions, with their wall mounts, have become like artwork and many people are not happy with the tangle of wires near their TVs.

The logic of using the PC as the heart of a converged solution is the PC can decode any content on the Web. Mahony reiterates it is the best device (as opposed to a standalone box) for streaming television and videos and he is right. I should mention he says this because the PC can decode anything and specialized equipment would have to be constantly upgraded to achieve the same functionality. Basically, the standalone box has to be a PC to function properly.
Mahony further explained that many of the networks do not like to have terms dictated to them by cable companies and moreover do not want to share their revenue with such partners. In addition, they are yearning to get more Internet viewers as these viewers can identify themselves and as such, provide a basis for more targeted ads which can mean more revenue.

One network has even told Mahony (he wouldn't say which) that they are now making more money online than they are on cable. This is partly because viewers seem to be more loyal online - watching more episodes and in addition, old content which is posted on Web sites is generating massive amounts of traffic and generating new viewers as opposed to cannibalizing existing ones from TV.

Mahony explains the box works with all content and various formats such as Amazon Unbox (now called Video on Demand), TiVo (News - Alert), Netflix, iTunes and others. In addition, the company has something called a Zviewer (soon to be released in Beta) which allows all videos to be watched from any PC. One of the benefits of this viewer and this solution in general is a menu system which allows access to a slew of content types which are updated regularly and is hopefully easy to navigate.

The system also supports Dolby high quality audio and Dolby 5.1 is in the works.
In addition, the remote allows Web browsing, meaning all HDTVs now have access to Web surfing. So, while watching a ball game you could use Picture in Picture or PiP to surf your fantasy sports stats.

The downsides are minimal - it is possible that configuration could be a problem but Mahony says it is pretty seamless and most users shouldn't have a problem. It is also a PC-only solution for the moment. In addition, a cable company or other broadband provider could make a stink about using bandwidth and limit your download speeds. This wouldn't be surprising to me as this box cannibalizes their primary revenue generator. I hope the FCC and politicians are reading and weighing the pros and cons of ISPs throttling bandwidth and in the process reducing the likelihood game-changing technologies successfully get into the hands of U.S. consumers.

Mahony also points out the solution may not be the best for sports as IPTV (News - Alert) and cable solutions provide better quality sports than what is available online at the moment.

In addition, you need an HDTV to work with this system but this is a minor challenge as well. Perhaps the last drawback is the price but even though the company feels the $499 price tag (News - Alert) may be high for a consumer electronics device, it really isn't. I say this because to get a wired solution which does everything ZeeVee does for such a low cost is a bargain.
Sure, we could argue all day about other ways to accomplish what ZeeVee is doing but their different approach is also embraced by the IPTV carriers who also repurpose the in-house coax wiring. I consider this a major validation of a well thought-out product.
It is also worth pointing out there is no per-month fee to use this service and the company is purposely trying not to put up any walled gardens, meaning you can access any content for free once you have the box. Still, Mahony does not discount the idea that a lower-priced box subsidized by a monthly fee and long-term contract won't be available in the future. In addition, ZeeVee is in discussions with partners who may be able to provide more flexible pricing terms and other distribution models. I wouldn't be surprised if the networks themselves started subsidizing these boxes.

From my perspective, this is a very intelligent and elegant solution to bringing the best of the Web to the TV. There are certainly many ways to accomplish something similar but the combination of Web access on the TV and the ability to access many types of media seamlessly from any HDTV in your house make the ZeeVee solution a real winner. I can't wait to try it myself.

Rich Tehrani is President and Group Editor-in-Chief of TMC. In addition, he is the Chairman of the world’s best-attended communications conference, INTERNET TELEPHONY Conference & EXPO (ITEXPO). He is also the author of his own communications and technology blog.

Edited by Stefania Viscusi

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