I've been mulling for a while over Mark Cuban's post suggesting that cable companies "save" Internet video. As usual, I applaud his grasp of the cold hard facts of the present. However, in this case, I was confused by the lack of historical context.

It took me a while, but I now think the missing history is a result of a particular bias and wonder how widespread it is in both non-Internet and Internet TV circles. Let's coin the term, "pipe bias" - the anachronistic thought dating to when pipes were costly, physical things, buried under the ground, that fixing/improving a existing pipe is more marketable than laying a new one. This bias is illustrated by one of Mark's primary propositions on why cable will preserve market position over the Internet: it's already in people's homes.

There are two fallacies implied by this argument: first that market position for pipes is mutually exclusive (i.e. getting Internet video necessitates giving up cable). Secondly, that market position for a pipe depends on matching the strengths of the incumbent. This is counter factual, ironically, to the history of the very pipe Mark contends will maintain hegemony. Cable got its start servicing people under served by the incumbent pipe (over-the-air), wooed a larger audience not with promises of picture quality, but signal consistency, and captured its currently large audience with more and better content choices. Even today, over-the-air has the advantage with regard to delivering HD (i.e. picture quality), but cable has the wins on all other current fronts. The lesson is: new models can win by simply doing something desirable that the old model couldn't even if they are a poor substitute for the old model

Let's put aside that two of coax's strong suits are coming under attack (see Sezmi and Verizon FiOS) and focus on the central competitive issue: an Internet based TV model has capacities that are foreign to cable.

1) The pipe is a multi-tasker - text, audio, pictures, video, holograms, and virtual reality. The TV experience is expanded into true multimedia

2) It is free on the margin. Once I've paid my general purpose Internet bill, access to most content doesn't cost any additional money (time spent watching ads, perhaps).

3) The catalog of content is limitless, whereas the broadcast model can only make available a certain number of programs per day.

4) It is fully configurable to a lifestyle, obviating the need for costly stopgap technology like time and place shifting (DVRs, Slingboxes).

5) The experience can be fully customized and adaptive, whereas cable by nature must tend towards mass media.

The market for Internet video will grow as creative people take advantage of these capacities to launch entertainment experiences that would "never work on cable", just like they took advantage of cable's bandwidth capacity to air programming that over-the-air couldn't carry. Furthermore, it's worth noting that cable's potential to match these capacities isn't enough. Creatives are an impatient sort and won't wait for cable to catch up to the Internet any more than they would have waited for over-the-air to catch up to cable (notable that the digital over-the-air transition will finally make possible a channel lineup larger than original cable lineups).

All that remains is to enable that creativity. Viewers need to be convinced to subscribe, advertisers need to be courted, infrastructure needs to be built, creative investment recouped. That is to say, business must be done. What made cable happen was the persistence of the door-to-door subscription salesperson, the person who negotiated to carry local stations over coax, the visionaries who brought us HBO, MTV, and the Food Network. Perhaps Mark is looking to those who worked their magic before from where he is sitting he believes the Internet has failed to cultivate their own magicians. From my perspective, on the court as it were, it's different. I look at Break and I see MTV. I look at Move Networks and I see high grade coax. I look at ffwd's personal channels and I see viral subscriptions.

On the other hand, the way Mark sees it should be a warning to anyone who thinks Internet video is just simply going to happen. Uh-uh. Hustlers made cable happen despite that over-the-air was good enough. So let's start hustling for Internet video, shall we? Or we may end up crying out for a savior ourselves.

I wonder if Stewart Brand and Tim O'Reilly have ever met. They might have cleared this mess up before the rest of us had to stumble through it. To wit:

Tim O'Reilly has said, the

"least-understood principle from my original Web 2.0 manifesto" is "Data is the Intel Inside".

Stewart's quote in full is much more measured

On the one hand information wants to be expensive, because it's so valuable. The right information in the right place just changes your life. On the other hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. So you have these two fighting against each other.

First let's consider the merits of each.

Tim conveys an historical counter-factual, that if you remove data from recently developed technology, it stops working. Without the index (and now the search log), Google is just a form-post text box. MapQuest is a few panning/zooming functions without NavTeq's atlas. Facebook may be nothing without the social graph.

Stewart conveys an  economic counter-factual, that information resembles currency which if used at the wrong place and time is worthless. Ducats can't be used to pay a bill denominated in Dollars. A promissory note for a thousand dollars 10 years from now can't pay my rent this month.

However, as factual statements they are both sorely incomplete and highlight rather than compensate for their individual deficiencies. To retain Tim's analogy while incorporating Stewart's logic you would need to accept the absurd corollary "Silicon wants to be free". It's more likely either or both of them are wrong (or so pithy as to be meaningless). Despite, there's quite a bit of unnecessary tension and confusion caused by technologists trying to resolve this conundrum.

As it turns out, a defensible (and more importantly, actionable) formulation can be extracted from the implicit caveats: Stewart's use of the word "right" and Tim's use of a the Intel brand rather than the generic word "microchip".

Transferring Stewart's caveat to Tim's statement is relatively simple, "The right information is the Intel inside".

Transferring Tim's caveat to Stewart's statement is trickier, but here's a shot, "On the one hand, information wants to be free, because the cost of getting it out is getting lower and lower all the time. On the other hand we can brand the delivery of the right information, in the right place, at the right time and brands want to be expensive, because they are so valuable. So you have these two fighting against each other."

Tim's fallacy is that any-old data could be the Intel inside. Stewart's mistake is attributing value to the "information" part of "right information" that is really due to the "rightness" part.

I'll leave it to the reader to articulate this synthesis in their own words for their own memory. Instead I'll end with an amusing illustration of the improved understanding it allows. Namely, we can now replace the previously silly corollary "silicon wants to be free" with the almost profound narrative "silicon wants to be branded". Neat, huh?

Thanks to Ian Schafer the CEO of Deep Focus, the web got a rundown on YouTube's Videocracy event in New York last night. The audience was apparently mostly marketing/advertising folks and the message was geared toward them, but there were a few product developments mentioned that suggest YouTube is about to go through the same identity crisis that the early players in the digital music transition went through.

The new features announced amount to early steps in the "socialization" of YouTube's distribution hegemony. I could be making the wrong analogy, but if it is anything like music, the essential strategic logic is that now that we appear to be on the road to lock-in on distribution/audience share, what value can we add on top of that to increase margins. This is coupled with trying to curb the low level of engagement (time spent per session, for instance). This line of thinking almost always results in some form of "power to the people" tactics for promoting content. To wit in YouTube's case:

• What YouTube tries to differentiate by calling it "active sharing" but is actually yet another implementation of the status functionality made popular by Facebook
• Collaborative filtering (again)
• Simple audience management tools as a preface to asking (soon begging) content creators to make YouTube their publishing homepage (i.e. don't buy your own URL and identity)
• ubiquity, meaning publish once watch anywhere

This is the most reasonable direction for YouTube to go, considering their options, but as the title of the event makes clear, it is really an attempt to claim the mantle of an idea (video democracy) which, and this is my key point, they are intrinsically against.

Full democratization of a space/industry should include a choice of distribution options. YouTube's conceit over the next year will be: anybody can participate, everybody has opportunity, and the vox populi will be heard, choices are limitless...as long as we all to choose to put our very colorfully differentiated eggs in YouTube's distribution basket. I repeat, this is a reasonable claim for YouTube to make and I'll add a reasonable bargain for the creator community to take, but with one important caveat: that there remains no other option.

What YouTube will (should, must) try to do in the video marketplace is exactly analogous what Amazon has tried to do with Marketplace, Fulfillment by Amazon, Advantage, etc. Amazon attempted to leverage their retail hegemony to co-opt the independence of smaller sellers. Likewise, YouTube is leveraging its distribution hegemony to co-opt the independence of smaller publishers. However, Amazon is not the company synonymous with the democratic marketplace. eBay is.

eBay was founded a year after Amazon, and while it wasn't exactly conceived along this line of thought, it does represent the best answer to the question: what would a place to buy things look like if you even democratized the sales/distribution chain? There would be no hegemonic warehouse, no single shipment provider, no single payment method (to wit, eBay's failed attempt to push BillPay). eBay, was originally thought of just as an auction company, then a marketplace, but in the context of this discussion I'd like to propose they are, in fact, a transaction information organization company.

One obvious criticism to this analogy that I'd like to put to rest quickly is that we shouldn't compare a retail space to an ad supported one. That criticism is just currency semantics. While consumers don't spend dollars at YouTube, they do spend time. In fact, this provides an opportunity to deepen the analogy. Just as it is in Amazon's interest that you spend your dollars at their site on items where they have the highest margin (lowest cost). It is in YouTube's interest that you spend your time at their site in a way that taxes their resources least (either watching video that someone else is paying to distribute/promote, or click around not watching video at all). eBay on the other hand, and this is a restatement of my key point doesn't need to care about any of this...they care about the total number of transactions.

One last point, before I get to the conclusion you can guess is coming. There is no strong evidence that one of these paths trumps the other. eBay's market cap is currently ~15% higher than Amazon's, but I'm sure the opposite was true at some point. Regardless both are worth over $30 billion Both continue to suffer from constant pressure on their core businesses and the need to expand into other areas to justify the valuation (Skype, Kindle). Both companies have made missteps trying to adopt the other's intrinsic natures (zShops, BillPay).

And now the proclamation you've all been waiting for. It's time for an eBay of the video space and ffwd is committed to building it. A democratic video information organization company that doesn't care which distribution platform you use and whose goal is to maximize the use of a viewer's time (currency)? Call us crazy, but we won't stop until we've either produced a worthy counterpart to hegemony, or flame out trying.

At ffwd we believe that  over the next six years or so, some really smart people are going to develop really smart methods for recommending video content and our goal is to provide a frame work for those methods to get sorted out according to the viewers they work for. In the meantime, we are building our own recommendation methods because we need them to test the framework, but we  already discussing integration strategies with some early pure-play recommendation companies and working with Mashery on a system for user initiated private info sharing.It's not obvious from the ffwd interface, so it is worth mentioning explicitly, as a video preference repository, ffwd wants users to be able to what they want with their data and where they want to. Therefore, at a very basic level, Michel can put away his worries that ffwd's success will aggravate the zero-sum game effect. Quite the contrary ffwd benefit from the adoption of portable user profiles as he describes it.

The user gets to experiment with which site has the algorithms and user base to provide good ratings in which situations, and the services get to compete on how good they do their jobs

See we take this notion a step further, namely a user shouldn't be forced to jump from site to site (UI to UI) in order to try out recommendation algorithms. Moreover, once they've found some they like they should be able to access them separately or in aggregate from a single interface. Most importantly they should be provided accurate info on how those methods are performing for them so they can guided amongst them wisely. Serving this set of needs is really where ffwd fits into the ecosystem. We plan to build a platform where a suite of general services are provided to recommendation companies so they can focus on building the best recommendation methods.

We were happy to see some coverage of our new video API on ProgrammableWeb's blog today. Their coverage of 30 Video APIs was also a quick reminder to us that the field of competition is heating up fast for both developers and consumers of video APIs, especially those that can be meshed into new types of social networking apps that make it easier for you and your friends to figure out how to "waste time more intelligently" when looking for videos (not my phrase, but it seems entirely appropriate in this context).

As we continue to roll out functionality on our beta site, we will be extending our API into other areas, which is pretty exciting for us. We're now in the process of enhancing our API to solve two distinct problems: how to let users know what's worth watching on the web, and how to let users know who else is watching it with them.  As always, we'll let you know as soon as this is available for you to try out.

If you are a beta site user, you can apply for a Developer API key now.

The findings of the BIGresearch Simultaneous Media Survey are not surprising, but the preponderance of it is shocking: 75% of viewers channel surf or chat when the commercials come on. The remaining people either tune out (33%) or watch (5.5%). Regardless of the purpose ascribed to TV advertising (for instance the "brand building" suggested in the article), that last number seems like bad news for TV ad dollars. That means only 5.5% of people are getting your message, right?

Wrong. I think the only real number to be concerned with is the 41% who channel surf. The remaining 59% are, perhaps subliminally, being influenced by the ad. For all you know, the chatting taking place could be about the ad itself (I know I do this). At the very least the chatting is happening around the ad (like a conversation at another table at a restaurant). The tune out folks could be the most ripe because their mind has entered a passive state and will take in messages with minimal discretion. This is all to say that TV ads work (at least as they are expected to) as long as they are not actively skipped (DVR or channel surfing). There is not much opportunity there for new media to break in.

The 41%who are taking active steps to find something other than the ad are the bunch the online video world have something to offer. The key is figuring out why they channel surf. Is it, for instance:

A. Avoidance of the ad.

B. The commercials breaks are their only chance to see what else is on without missing anything

C. Enjoyment of channel surfing in it's own right.

Constantly exploring these questions has informed our design for a living room viewer experience that breaks three restraints of the broadcast model

1. Linear programming

2. Lack of personalized relevance

3. Not interactive

Janko's new post at NewTeeVee was a thought provoking look in the mirror. His suggestions for Joost amount to five decisions where Joost went one way and ffwd went the other, like branch points on an evolutionary tree. It's yet another way to define what we are doing in contrast to our compatriots in the space. In chronological order:

Build a web version - ffwd is built around standards compliant browsers and the Internet protocol as platform/application environment.

Integrate Hulu - it's all queued up in our labs, just waiting for the paperwork from the Hulu team.

On the Wii - Since we designed the product from the ground up for a living room experience (we actually have a "living room of the future" to test stuff on) the service has always worked on the Wii browser. January, though has been Wii optimization month (how could we resist 16 million boxes) so get those Wiimotes ready for a brand new bag

Podcasting client & Firefox plug-in - Both of these functions are wrapped into products we have planned for later in the year. What we are internally calling the "tracker" would allow for subscriptions and saved searches across a bunch of different categorizers (not just "Podcast name"). We actually experimented with a plug-in during the Project Vadver days and found it was either too little or too much: our solution, either a bookmarklet or...well, maybe we'll keep that one as a surprise for later.

These are pretty defining decisions for ffwd and so I imagine for Joost, too. It's going to be hard for them to reverse any one of them let alone all of them. And besides, it's so early on in the space that we need a diversity of related species out there to determine which characteristics are the best to carry forward to the next generation of creations.