Video services

Will Telcos Want Their Dave.tv?

Atlanta-based IPTV provider Dave.tv says it anticipates closing a significant funding round as the launch of its set-top box product nears.

The company has built a peer-to-peer distribution network that it says can deliver IPTV programs -– as streaming media or as downloadable files -- to viewers via just about any IP connection. "We don't build the physical network, but we have a virtual network that spans all the physical networks out there," says Kenneth Lipscomb, Dave.tv's founder.

So far Dave.tv (Distributed Audio Video Entertainment Television) is backed only by its management staff, friends, and family. "We've put in about $6 million to date. We'll probably close a $10 million-plus round in the next two or three months," says Lipscomb.

Lipscomb was also the man behind ZapMedia, a now-defunct company that produced the ZapStation, a $1,500 digital media set-top box that stored downloaded music, movies, and other Web content. The vision then, as now, was to erase the line between what's consumable via the Internet and what's watchable in the living room.

The comparisons to ZapMedia end there, as Lipscomb is joined by some faces new to the IPTV world. Rex Wong is Dave.tv's CEO. He helped found Applied Semantics, which Google (Nasdaq: GOOG) bought for $102.4 million in 2003. Trey Gaskins is the chief operating officer. His last gig was as the founder and president of Advanced Telemedia, a Georgia-based cable MSO that Comcast Corp. (Nasdaq: CMCSA, CMCSK) bought in 2003.

Dave.tv has built a service that resembles a patchwork of old and new ideas. Like ZapStation, Dave.tv is linking all media types in the home and on the Internet together for viewer perusal from their TVs. But like Vonage, Dave.tv requires users to bring their own bandwidth. And, when they do, it supplies programs from more than 100 channels.

The Everlasting Gospel Broadcast Network and Femalemuscle.com are among the channels listed so far.

In addition to selling its service to consumers, Dave.tv is actively talking to cable companies, satellite TV companies, and telephone companies about how to incorporate its service into their video offerings. Lipscomb says those distribution conversations have included at least one Top 10 telco in the U.S.

Dave.tv is similar to peer-to-peer video services offered by Akimbo Systems , which also uses home broadband connections to deliver various kinds of video entertainment -- blogs, movies, documentaries, etc. -- to PCs and set-tops. Another potential competitor is Brightcove Inc. , which hasn't launched yet, but is also devising a way for video producers to reach consumer audiences via the Internet.

But Lipscomb says the Web's free stuff gets his goat: "Right now our biggest competitor is BitTorrent . They deliver, like, 30 to 50 percent of the content that's consumed on the Web, but that's a totally illegal system and nobody makes any money off of it."

Like, totally!

What isn't clear is how services like Dave.tv will be perceived by the service providers. Will it give them a leg up in offering video services? Or will it be seen as competition to their own IPTV plans?

"Service providers are looking at all this stuff and saying, 'Where does the ownership of the service actually come from?' " says Rick Thompson, senior analyst at Heavy Reading. "I think they're all a bit confused as to how it'll all play out."

Lipscomb, however, thinks his company's timing is spot on. "Now that Apple has broken the dam, or put a crack in it, all of the major content providers are rushing to try to make their libraries available for IP consumption."

Dave.tv hasn't revealed its pricing strategy, but the company says a "significant amount" of its content will be ad-supported and free to users. But the company's real step forward will be when its hardware hits the market and some larger service providers sign on to help it reach the masses. (See Dave.tv Adds IPTV Service.) The company's HDTV-capable set-top, the Xport, will be available in March or April, Lipscomb says. The box, which features Ethernet jacks and wireless connectivity, can play videos from itself, a networked source such as a PC, or from the Internet.

No pricing information is available for the Xport yet, but Lipscomb hints that it won't be anywhere near ZapStation's $1,500 tag. "We've designed it from the ground up to be very low cost. It's running Win CE 5.0 and it supports HD right out of the gate." — Phil Harvey, News Editor, Light Reading

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opticalwatcher 12/5/2012 | 4:07:38 AM
re: Will Telcos Want Their Dave.tv? There are three things you need to receive television:
1. Content (the shows/movies)
2. Distribution: air waves, satellite, broadband
3. Destination device: television, set top box, Ipod

What is Dave.tv offering?
It sounds like they are offering #1 and #3.
Given media PCs designed to Intel VIIV and AMD Live! specs combined with Windows Media Center software (and probably upcoming equivalents from Apple), I don't see how anyone can create yet another set top box for receiving content over broadband--unless they have some amazing content that you can't get anywhere else.
DCITDave 12/5/2012 | 4:07:37 AM
re: Will Telcos Want Their Dave.tv? That's the key, isn't it? If they're striking deals with lots of exclusivity, it might have a much stronger appeal.

I'll probably try out the PC-only client first just to see how interesting some of the channels are.

One question: Do you think carriers and cable guys will really dig this as a adjunct to what they're already doing?

opticalwatcher 12/5/2012 | 4:07:33 AM
re: Will Telcos Want Their Dave.tv? Looking at the content you listed at:
there's certainly some interesting stuff there. But that is not ALL I would want to watch. Give me HBO and Disney for the kids, etc.

If their content is exclusive to their own box then they don't have a chance--I'm not going to hook up their box to my system just to get their channels.

If their content is stuff I can get on the internet anyway then why would I pay them?

I think their best bet for being successful (using my Content/Distribution/Destination model) is:

IPTV represents a new distribution channel. It needs content to compete. Dave.tv can offer them an interesting package of exclusive content, which will allow them to distinguish themselves in the competitive market.

They can also offer their content for sale on the web. Lots and lots of little companies are trying this out now. I think you would need an amazing collection of content to succeed against the hundreds of competitors or you could align yourself with a big player by offering the content for sale through Apple/Google/Yahoo.

If their media center is exclusive to their content then they will go the way of Akimbo, which is nowhere--I don't care how cheap their device is. If they can make a general purpose low cost media center (much cheaper than a PC, which is pretty hard to do even if they use Windows CE), then maybe they have a chance.

It is interesting that Google was supposedly working on a distribution device too, but then we heard nothing more about it.
paolo.franzoi 12/5/2012 | 4:07:32 AM
re: Will Telcos Want Their Dave.tv?
I think the issue is that content is not a scientific phenomenon. What connects for people varies so much by so many factors that one can not predict whether any content is going to have value. You can not know what the measurables of the content until after it is created.

Distribution networks and End Devices are scientific things. Bandwidths and pixels are ways that can be engineered, measured, improved, a priori (product bugs aside). You can know what you are getting at the time of investing dollars.

Both have Return on Investment challenges. They must be managed separately (even if in a common business). You would like the content to be able to be seen by as many people as possible. You would like the distribution/endpoint to be able to carry as many kinds of content as possible.

So, putting the two together and making them exclusive seems bad.

DCITDave 12/5/2012 | 4:07:32 AM
re: Will Telcos Want Their Dave.tv? I mean, obviously they'd be better off if they carried LRTV. But that goes without saying, right?

paolo.franzoi 12/5/2012 | 4:07:31 AM
re: Will Telcos Want Their Dave.tv?

Got to drop that Raynovich character. He mucks up the videos badly. After that LRTV would be pristine.

I can imagine a daily 5 min newscast...."This is Phil Harvey signing off. Lucent sucks!"

DCITDave 12/5/2012 | 4:07:30 AM
re: Will Telcos Want Their Dave.tv? Does anyone think a lot of this will end up like Internet portals did in the 90s?

There were dozens of news sites and most of them offered the exact same stories -- AP and Reuters wire copy -- with no differentiation.

I'm wondering how many TV or content services a consumer will sign up for if all of them are just (1) repurposing Internet content or (2) offering the same 5 National Geographic documentaries that everyone's already seen ("Ohh, look. The gazelle is slower than the lion.").

Seriously, is Mark Cuban (http://www.blogmaverick.com) the only one thinking about content these days?

unlimited 12/5/2012 | 4:07:30 AM
re: Will Telcos Want Their Dave.tv? This is an interesting area and it seems there are several things that will drive directions.

The convenience and quality of DVRs seems to change people's viewing habits. When you can load up the HDD with shows that you would otherwise miss and may or may not watch, it fills in the gaps when there's nothing worth watching.

If you look to what the early adopters are doing with home theater PCs and open source software it is perhaps a clue where things may go. They run servers that capture content from various sources (cable or satellite and antenna) then have frontends that can stream live or recorded video streams from the server to any of several TVs or PCs scattered around the home network. It costs more today but is partially offset if you can cut back on the number of settop boxes and service charges for them.

Add to the mix the idea of iPods and PSPs that are becoming portable PVRs and maybe there are a couple of additional distribution models. One is the online video download store and the other might be to go and collect the video from a store or Kiosk onto your portable storage device and sync it with the media server at home. I think I read that someone was offering that service for the video iPods now. IPTV then might just be another source streamed straight to the media server for later playback.

For this to go mainstream home wireless networks will have to get easier to install and the CE industry will have to make consumer friendly media systems at an affordable price. It's pretty much there for Geeks today though!
DCITDave 12/5/2012 | 4:07:30 AM
re: Will Telcos Want Their Dave.tv? My sign off was going to be "courage" but apparently that's already been done.

OldPOTS 12/5/2012 | 4:07:29 AM
re: Will Telcos Want Their Dave.tv? My initial impression was that this would be like the audio recording streams that are available for free and/or purchase online. Some of that content is the only way that budding artist have to present their songs to large audiences and bi-pass the distributers that try to control the recording industry.

Also I race sailbots. Well watching a sail boat race can be like watching grass grow if you don't understand what is going on. But there is an audience. Not just a big one. They occasionally have some races on OLN.

I see this a way to try new content and content that appeals to a smaller but loyal audience with limited expenditure by the big boys.

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