PODCAST

The Network Is Us: Q&A With Metacafe CEO Erick Hachenburg

Two major factors that have spurred the rapid growth of online video include the increasing availability of broadband Internet access and Web 2.0 technology that allows user interaction with and control of content.

Those, according to Metacafe CEO Erick Hachenburg, are the main reasons online video is outpacing traditional TV in the contest for viewers’ eyeballs.

With 37 million unique monthly visitors, the online video network Metacafe is the second-largest online video site. Only YouTube has more monthly visitors.

Hungry for Video


Listen to the podcast. (21:59 minutes)


A few years ago, YouTube tapped into an emerging and voracious appetite for online video. Hachenburg and the market will continue to grow rapidly as more viewers trade TV time for online video.

Already, online video viewing has reached the popularity of online search, Hachenburg said. Despite such rapid growth, however, there are some key challenges facing the industry. They include freedom of speech issues, which will be important as a variety of content is created and uploaded to video sites; advertisers’ fear of being associated with the wrong content, and the struggle to develop revenue streams.

Despite some mergers and acquisitions in the sector, Hachenburg thinks online video is only about midway in the narrowing of the competitive field for video sites.

Other trends include the following:

  • The growth of online TV, where the old TV model is simply transferred to the online arena
  • The explosion of short-form video content, which will be driven by innovative content producers

In the coming years, Hachenburg expects that a small handful of players will dominate online video as large video aggregators but will co-exist along with niche sites that draw much smaller numbers.

Here are some excerpts of the interview:

E-Commerce Times: Could you define what the industry looked like three to five years ago, and how it evolved to what it is today, and what it is today?

Erick Hachenburg:

As you know, Metacafe is one of the largest video sites out there. In fact, we call ourselves the largest independent, because aside from YouTube, which is part of Google now, we are the biggest online video player out there, but when you look back at the history, we all realize that YouTube tapped into a really new and big phenomenon, a very important phenomenon, in the Internet space.

I don’t know if there’s a property that has grown to be a top-five Internet property worldwide as quickly as YouTube has — it grew faster than MySpace, I think it grew faster than Google in its day. It’s really a remarkable phenomenon. I think it speaks as much to the voracious appetite for video and the power of video — something we saw … when television became the predominant form of media and will continue to do in this century, but with the distribution being on the Internet.

YouTube tapped into that and showed that this is something everybody loves, everybody engages in, with the added dimension that you the user can start creating as well as choosing what you want to watch, when you want to watch, how you want to watch.

ECT: What spurred the growth of Metacafe?

EH:

There’s a lot of talk about what does Web 2.0 mean, and of course everybody has their own definition. But what I think spurred it is really a couple of things. First, broadband and the pervasiveness of broadband — the fact that broadband is available in 60 to 70 percent of households now, so video is possible to be distributed to everybody.

But Web 2.0 also brought interaction, meaning the consumer was given the power to upload what they wanted to upload, choose to see what they wanted to see — but even to take that video, I’m sure you’ve heard the concept of the embedded player, which is not a very common term, but the embedded player, meaning that you’re able to take a video that you watch on a site and bring it to your own site or your own Facebook or MySpace page and put it there so it feels like it’s your own.

The idea that you’re going to go to a station, a channel where you’re going to watch something is not a metaphor that works on the Internet. You go to your own page, you go to a friend’s page, you go to a page where an e-mail sends you. Web 2.0 enabled that. It’s easy to watch, it’s easy to upload, but most importantly, it’s easy to take that video where you want to go — and that changed the way media is being consumed.

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CRM Buyer Channels

Play-To-Earn Gaming Faces Hurdles To Rapid Growth

Reddit co-founder Alexis Ohanian raised some eyebrows in the gaming world recently when he predicted on the “Where It Happens” podcast that play-to-earn gaming would take over 90 percent of the gaming market in five years.

“Ninety percent of people will not play a game unless they are being properly valued for that time,” Ohanian declared in the podcast.

“In five years,” he continued, “you will actually value your time properly, and instead of being harvested for advertisements, or being fleeced for dollars to buy stupid hammers you don’t actually own, you will be playing some on-chain equivalent game that will be just as fun, but you’ll actually earn value, and you will be the harvester.”

Play-to-earn games typically use cryptocurrency instead of proprietary tokens for in-game rewards and earnings. The most popular play-to-earn title is “Axie Infinity,” a Pokemon-style game where Axies can be bought and sold for Ronin cryptocurrency.

While play-to-earn gaming is gaining in popularity, most of the excitement and interest is tied to future opportunity, rather than changes to current gaming business models, explained Michael Inouye, a principal analyst with ABI Research.

“The larger opportunity comes from the hype surrounding the metaverse, where digital goods will be earned, bought and sold like real-world, physical goods,” he told TechNewsWorld.

“Gaming is a natural entry point because it’s already virtual and 3D and gamers are accustomed to dealing with virtual assets and items, so there is certainly strong growth potential,” he said.

Optimistic Forecast

Ross Rubin, the principal analyst with Reticle Research, a consumer technology advisory firm in New York City, explained that over the years, there have been a number of experiments with paying people to do all kinds of things, such as watching ads or playing games.

“Usually, payment is in a proprietary currency, which could be redeemed for prizes,” he told TechNewsWorld. “Play-to-earn gaming is an extension of that.”

“Cryptocurrency, though, is more widely accepted than proprietary currencies,” he continued. “It also allows something to be done that was very difficult to do in the past. It enables micro transactions. That may make play-to-earn gaming more practical than it might have been in the past, but there’s still a lot of challenging dynamics.”

He asserted that Ohanian’s prediction was “extremely high.”

“So much of the market is made up of casual gamers — people playing a game on their mobile phone waiting for a train or in an elevator or waiting room,” he said.

“It would represent a fundamental reversal of what has been a very profitable model — in-app purchases — where the money has been flowing the other way, to developers and game companies,” he observed.

“It’s too optimistic,” added Chirag Upadhyay, an industry analyst with Strategy Analytics, a global research, advisory and analytics firm.

“Developers and gaming companies are trying to make money from software,” he told TechNewsWorld. “This will take away from that.”

“There won’t be a large interest in the model from developers and gaming companies unless it presents them with a large opportunity to make money,” he said.

Developer Resistance

Mark N. Vena, president and principal analyst at SmartTechResearch in San Jose, Calif., called Ohanian’s forecast “wildly optimistic.”

“I’m highly skeptical of the 90 percent figure,” he told TechNewsWorld.

“Most of the gaming community is on consoles and mobile devices,” he explained. “The guys who write the titles for those platforms are very reluctant to change their business model.”

“Play-to-earn gaming requires those developers to get on board with it,” he continued. “To do that in five years would take a really heavy push.”

The use of cryptocurrency could also be a problem. “Its instability could be a headwind to game developers getting on board with play-to-earn gaming,” he noted.

What’s more, he pointed out that five years is still within the lifecycle of the new Xbox and PlayStation gaming consoles, which are not built for NFT and cryptocurrency implementation.

“Microsoft and Sony would have to have to do things at the platform level to make that work,” he observed. “I don’t see them doing that.”

“Future platforms may support the trend,” he added, “but I don’t see that happening in the short term.”

Paid To Play

Lewis Ward, research director for gaming at IDC, voiced concern over what may be the underlying driver of play-to-earn’s popularity.

“I don’t think these play-to-earn games are great games, driving gamers to play them because they’re great games,” he told TechNewsWorld.

“My understanding is that a large chunk of the Axie Infinity user base is being paid to play the game,” he said.

“People in the cryptocurrency world are paying people to play games in order to drive up the valuation of the cryptocurrencies and their relationship to NFTs,” he asserted. “In that world — if you have a lot of liquidity, a lot of people buying and selling what you have to offer — it makes other people confident it’s going to rise in value over time. So the companies behind the cryptocurrency have a vested interest in driving up the transaction volume.”

“My concern is that what’s been driving interest in play-to-earn games is a form of self-dealing,” he continued. “Companies in and around this space are effectively paying people to play these games to drive up the value of cryptocurrencies that they can monetize. It becomes a money-making operation.”

“This can create a raft of legal issues, once you get into children and the extraction of cryptocurrencies into fiat currencies,” he added.

“That’s why play-to-earn games are not in the Apple App Store or in Google Play Store,” he said. “The platform owners don’t want to get in the middle of something so unsettled from a legal perspective and potentially open themselves up to lawsuits down the line.”

Inouye noted that there will certainly be value in digital goods and NFTs in the future, but there is a great deal of work and experimentation that needs to happen before it becomes the dominant revenue generator for the gaming market.

“In this context, pay-to-earn should be viewed more as a way to reward gamers for their efforts and virtual collections, but it’s going to take a significant lift to shift the revenue streams away from premium and advertising,” he said.

“I’m not saying it’s impossible within five years — we’ve seen some unexpected changes happen in short time periods — but the probabilities I would say, are really low,” he added.

John P. Mello Jr.

John P. Mello Jr. has been an ECT News Network reporter since 2003. His areas of focus include cybersecurity, IT issues, privacy, e-commerce, social media, artificial intelligence, big data and consumer electronics. He has written and edited for numerous publications, including the Boston Business Journal, the Boston Phoenix, Megapixel.Net and Government Security News. Email John.

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OPINION

4 Industries on the Brink of Technological Disruption

One of the stories told in management classes as an example of a recurring mistake companies make when their industry is transitioning focuses on buggy makers at the turn of the last century.

Those that figured out they were in the personal transportation business pivoted to cars. Most of the others that thought they were only in the buggy business became extinct because their market moved to cars, and they didn’t.

Seems obvious after the fact, but clearly at the time it didn’t seem obvious at all because most buggy makers and those that sold horses and did blacksmithing went out of business.

In the case of autonomous cars, we are looking at moving from car ownership to a service like Uber that will provide a car just when we need it.

But, going further, initially with services like Zoom and eventually with the metaverse extending the concept of holoportation — coupled with drone delivery and the pandemic — will we even need cars as much, or at all, in the future?

Holoportation, or the use of avatars to travel virtually, is not considered personal transportation today. But if it is successful, it could eliminate most personal transportation in the future, and in turn put existing car makers in the same category as those buggy makers were a century ago.

Should holoportation be considered part of the transportation industry, or should existing personal transportation be considered part of old school collaboration, social networking, and shopping?

Let’s talk about a some of these big coming technology disruptions. Then we’ll close with my product of the week, a head-mounted display from TCL called the Nxtwear Air that could become this year’s must-have gadget.

Personal Transportation

Before the pandemic, personal transportation was mostly focused on cars with air transport, human powered transport, and even motorcycles largely falling into different classes. But with the increased use of video conferencing and collaboration products like Zoom, Teams, and Webex, the need for business travel has taken a significant hit.

Among the cool stuff at CES this yearPortl and La Vitre demonstrated a way to visit family and friends virtually, while a solution from ARHT Media called Holopresence showed how you can speak at any remote event without ever leaving your home, yet appear to actually be there.

While we are currently still habit-bound to travel, the pandemic is forcing us to reconsider our safety and aggressively consider not traveling. We don’t really need to go to the store anymore as delivery options have expanded. Because of Covid, our doctors increasingly meet with us remotely, and we’ve been able to use services like Amazon and eBay to get around our need to go to malls and department stores.

When cars become truly autonomous, why will we need to own one for the few times we have to leave our homes? Just contact the car service and an automated vehicle will appear at your door and function pretty much like an elevator in a high rise. You don’t need to own an elevator, so why would you need to own a car?

At CES, a lot of the car designs looked more like rolling living rooms than cars, and several of them were rather ugly. But so are elevators, and we don’t seem to mind that much what they look like any more than we used to care about those old yellow cabs or buses.

Plus, we haven’t even begun to talk about flying cars and people-carrying drones, both of which are advancing very quickly. Once vehicles are autonomous, we won’t need professional drivers or driver’s licenses because humans won’t be driving.

Film and Television

In video games, we have a concept called NPC, which is a non-player character that follows a set script. But isn’t that what actors and extras do? Soon, it might be far easier to program an NPC to appear in a movie and convert a script to a realistic representation of the character far easier, and far less expensively than hiring a person.

Actors can get sick, they can have behavioral issues, they can get into trouble off screen resulting in their termination, and they get more expensive every subsequent time you use them. Movies today are largely filmed with computer graphics anyway and it is much easier for a rendered character to operate on a virtual stage than it is for a human.

Now, it isn’t just the acting. Script writing can now be done using AI. You don’t need catering or recruitment for virtual players, and with a digital movie-making engine, you can more easily rewrite the script and digitally reshoot the scene when fine tuning the result with digital characters than with humans.

Studios like Dust are already creating relatively high-quality content using far cheaper digital tools, and an increasing number of movies today use rendered people as extras for scenes that previously would have required humans in those roles.

So, do we replace directors, writers, actors, extras, camera people, and all the rest of the movie staff with a few programmers and advanced artificial intelligence? The result is still a movie — and services like Netflix and Amazon have a never-ending appetite for content today. It seems to me like video game studios might well displace movie studios before this trend is over.

Farming

Traditional farming methods are becoming largely obsolete due to climate change. We are moving to warehouse farms which produce more food in much less space and can exist a lot closer to customers located in cities.

Farms such as these are increasingly tended by robots and autonomous equipment to reduce cost and contamination and operate at a scale that traditional farms generally can’t match.

In addition, for ranchers, we are developing healthier, tasty alternatives to beef, chicken, and other animal protein sources.

These changes should be not only more reliable during times of rapid weather change, but also potentially more beneficial for the environment because you don’t need to clear rain forests and you no longer need to eat other animals. Some of the animals we eat are huge producers of methane gas which contribute significantly to climate change.

Does this mean farming will become like manufacturing, particularly when we start 3D printing food? The farm of the future could simply be another factory.

Manufacturing

Warehouses and factories are changing with the increased use of robots and reduced need for human workers. Factories effectively evolve into huge 3D printers that can produce both cookie cutter products at volume, and far less expensive custom offerings thanks to increased automation.

Are factories still factories once they are fully automated? Or are they just huge appliances that 3D print the products we want on-demand and ship them using the increasing variety of autonomous vehicles and package-carrying drones?

Fully automated 3D printing factories should have fewer shutdowns, be less impacted by inflation slowing their growth, and be more able to meet transitory demand using a just-in-time manufacturing model. Also, because these automated factories will use 3D printing as part of their process, they can be smaller, more localized, and probably more resistant to logistics disruption.

Wrapping Up: Tip of the Iceberg

I could go on for pages about the massive disruption of electrics replacing internal combustion engine (ICE) cars, personal robots, military drones (we may not need military pilots or drivers in a few years), fast food robots turning fast food restaurants into large food vending machines, and satellite-based data and voice services — and we already have advanced coffee vending machines that make a better cup of coffee than Starbucks.

Is personal transportation actually personal, or is it becoming part of the communications market? Are restaurants, factories and 3D printers merging to become part of the technology market? Are movies and video games going to merge and provide different experiences but use the same creation tools and back-end. If so, what do we call the result?

PCs and smartphones are merging at a rapid pace, but is the result an enhanced smartphone or a more portable PC? These are all things that will be addressed in the next decade and those companies that figure out what new segment they are in will likely survive. Those that don’t anticipate these changes and evolve with the times probably won’t.

But one thing is for sure, this decade is going to be known for both an unprecedented amount of change and a lot of companies and people suddenly discovering that the road they were on dead-ended. You’ve been warned.

Rob Enderle's Technology Product of the Week

TCL Nxtwear Air Wearable Display Glasses

One of the coming disruptions are head-mounted displays which are finally reaching a price and performance level that makes them viable. The TCL Nxtwear Air head mounted display is powered by the smartphone or PC it is connected to and it projects a HD image into the glasses that is like watching a 140-inch screen from four meters away.

TCL Nxtwear Air Wearable Display Glasses

While this is mostly for movie watching rather than a monitor for work or gaming, it is a significant step toward that latter category and, eventually, head-mounted displays will force a major shift between PCs and smartphones, particularly when coupled with cloud services like Windows 365.

Once they are in wide use, the need for monitors, laptops with screens, and even personal TVs may become a thing of the past. We may decide that even when we are sitting together, using our own screens which can be adjusted for our eyesight and unique problems (like colorblindness) will be a better solution than the large screen experiences we have today.

What makes these latest TCL glasses interesting is that they are 30 percent lighter than previous generations and they don’t look dorky. The glasses provide decent detail (though I expect the 4K glasses that will eventually follow will be better), deep colors and surprisingly deep blacks. They have built in speakers that sound pretty good and mean you can often leave the headphones at home (I’d still use headphones on planes or when near others, however).

Expected to cost just under $700, these glasses are competitively priced when you consider that 140-inch display likely costs more than any car you’ve ever purchased, making them potentially a true value — and my product of the week.

The opinions expressed in this article are those of the author and do not necessarily reflect the views of ECT News Network.
Rob Enderle

Rob Enderle has been an ECT News Network columnist since 2003. His areas of interest include AI, autonomous driving, drones, personal technology, emerging technology, regulation, litigation, M&E, and technology in politics. He has an MBA in human resources, marketing and computer science. He is also a certified management accountant. Enderle currently is president and principal analyst of the Enderle Group, a consultancy that serves the technology industry. He formerly served as a senior research fellow at Giga Information Group and Forrester. Email Rob.

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