More Proof That Providing Dumb Pipes Is Smart ... Very Smart

I have written previously about the smartness of cable companies focusing on providing so-called "dumb pipes" -- i.e., broadband -- despite more press being written about those companies losing content subscribers.

Here's more proof of why that is smart, very smart. In a statement issued by broadband provider Hong Kong Broadband Network (HKBN), as reported initially by Gigaom, the company stated that it "embrace[s] Over-The-Top (OTT) content providers who help fill up our excessively Big Fat Dumb Pipes. We happily co-exist with OTT providers ...."

Now THAT's the spirit! Why? Because the margins for providing broadband are significantly higher than margins for providing cable content packages themselves. For HKBN, it reported a healthy 17.5% return on equity.

As HKBN points out, its broadband biz benefits brazenly by the beautiful bounty of accelerated growth of online video -- which requires fatter and fatter pipes. The more compelling content that is out there, the more consumer demand for fatter pipes. And, the fatter the pipes, the more creation of compelling OTT video content.

It is a beautifully synergistic world. Kumbaya!

Online Video January 2012 Metrics -- comScore Style

Industry leading measuring firm comScore just released its January 2012 online video metrics -- which, again, not surprisingly reflect the relentless growth of online video. Here are salient numbers for the month of January:

-- 181 million U.S. Internet users watched 40 billion videos online

-- this represents 84.4% of the U.S. Internet audience

-- Google sites (primarily YouTube) led the way with 152 million unique viewers

-- VEVO was a surprising second with 51.5 million uniques, Yahoo! sites third with 49.2 million

-- average viewer of online video watched 22.6 hours of video online -- think about that!

-- VEVO finished with the highest engagement of any site with 62 minutes per viewer

-- the average online video was 6.1 minutes in duration

-- Americans viewed 5.6 BILLION video ads in January (2.3 billion video ad minutes)

-- Hulu delivered the highest frequency of video ads to users, averaging 43 per viewer

-- video ads accounted for 12.2% of all videos viewed

Silicon Valley's Ski Week -- Should Have Been Last Week

Shhh ... do you hear that uncharacteristic silence in the sacred halls and offices of Silicon Valley VCs and tech companies? Today is President's Day -- and that means that today marks the official beginning of Silicon Valley's annual rite of passage for families called "Ski Week." You see, many schools in the Valley (and elsewhere) are off for the entire week for winter break -- and many flock to the slopes. And that means crowds. Huge crowds. And that means long lift lines. Very long lift lines. And that means less skiing. Much less. And that means frustration. Much frustration.

All of this could have been avoided, of course, if families jumped the gun and attacked the slopes last week. Which is what my family and I did ... thanks to our school in North County, San Diego which took last week off. We have school today on President's Day as a result, but that is a small price to pay for having the mountains of Deer Valley virtually all to ourselves. And with fresh powder to (ski) boot!

Smart. Very smart. And, much more family harmony ....

[NOTE TO MY DIGITAL MEDIA/TECH READERS -- I rarely write about personal "stuff"; but, indulge me for this rare time. Having a personal life IS important -- even in the tech world! And, it was priceless seeing my two kids, Hunter & Luca, attack black diamonds and double blues for the first time! Trust me on one more thing -- ski week is a significant gathering of the Silicon Valley/tech "tribe" in all of the various slopes on the West Coast. The tech world will be much quieter this week.]

VIDEO -- L.E.D. Snow Boarder -- Glowing ...

Just finished 4 days of skiing in Deer Valley, Utah with my family. Inspired by this video -- check it out.

Cable Companies, Don't Fear the Reaper (of OTT Video)

Cable giant Comcast just reported its financial results. And, guess what? Despite all the sturm and drang about over-the-top (OTT) premium video services like Netflix and Hulu cannibalizing its subscription content distribution business, Comcast did just fine. Specifically, Comcast reported healthy profits -- 26% increase in profits from one year earlier.

How did that happen?

Yes, Comcast continues to shed TV subscription customers. But, Comcast's core broadband business -- i.e., so-called "dumb pipes" which carry that video -- is expanding markedly. Comcast added 336,000 high-speed Internet subscribers in its last quarter. And, importantly, Comcast's profit margins for its broadband business are significantly higher than margins in its content distribution business (I have previously written about this).

The accelerating consumer demand for broadband-intensive OTT premium video -- from the growing list of behemoths (Netflix, Amazon, Hulu, Vudu, Google/YouTube) -- will only continue this trend for big "dumb pipe" providers like Comcast.

So, enough with fearing OTT video cannibalization. Providing dumb pipes seems pretty smart to me ....

On Vacation on Valentine's Day With No Cards in Sight -- egreetings To the Rescue!

So, here I am with my family on a long-overdue ski vacation in Deer Valley, Utah. The conditions are epic -- fresh powder. Everyone healthy. My two little ones, Hunter (12) and Luca (9) are skiing with my wife, Luisa, and me for the first time -- and are all over the mountain (in a good way)!

But, today is Valentine's Day of course -- and there ain't a card store in sight. So, what's a husband and father to do? Well, being in the digital media world, how about good old-fashioned online greeting cards from egreetings! Yes, that egreetings. Not exactly the most emotional or deep alternative, but still at least something.

Here's the crazy part, I haven't sent an egreeting since late 1999, after I left my long-time gig at Universal Studios and began my permanent joining of the land of the Internet/digital media/technology world -- beginning with ... egreetings (yes, that egreetings)! I joined egreetings in late 1999 right before its much anticipated and high profile IPO which, ultimately, fizzled and was one of the first real bellwethers of the coming web 1.0 crash. And, I stayed for a blip after I received my first offer to run (as COO) a real viable and innovative digital media company -- eNow (which later became Relegence and was ultimately acquired by AOL).

Egreetings -- my digital media/technology journey began there. I guess my egreeting card to my wife and kids is meaningful after all ....

The Fisker Karma - Not Just THE Ultimate Driving Machine -- It Is the Batmobile!

Move over BMW. Move over Porsche. Move over Mercedes, Ferrari, Lamborghini.

Make room for Fisker's "Karma" -- the most incredible hybrid -- scratch that, automobile -- you will see on the road today. And, of course, it is funded by Silicon Valley tech titans, including Kleiner Perkins (private funding of over $500 million), as well as hundreds of millions more in government loans.

I know, I know -- Tesla is the tech/digital media darling car. And, yes, it is cool, very cool.

But, Fisker's Karma is akin to an Apple product -- it is the automobile equivalent to an Apple product -- it is absolutely beautiful, sleek, stunning ... and the overall user experience (i.e., the drive!) is intuitive and incredible.

I now know this because I experienced the Fisker "experience" first-hand. No, it isn't my car. No, I did not test drive it. But, someone I do know has one -- and I experienced it as a passenger -- and I am sold (and I'm not even that much of a car guy).

And, oh yes, once again, it is a hybrid. It is smart. Very smart.

Here's one thing that blew me away -- the Karma's cost. I had thought it would be at least $150K (like all other ridiculously overpriced so-called "ultimate" driving machines). But, no -- substantially less at a bit over $100K. Don't get me wrong, I have no plan to spend that kind of cash to buy a car. Still, that massive sum of money is not that much more massive than a fully loaded BMW 750. And, the Karma blows the 750 away in every single respect.

The Karma, in a word, is the batmobile. That's what it looks like. That's what it drives like. And, that's the impact it has. It is other-worldly compared to all other cars I have seen and touched. Like an Apple product, it represents the seamless embodiment of art and technology.

And, to think, this is just the beginning for Fisker -- this is v1.0.

I am a believer ....

You Down With O.V.P. (Yeah You Know Me) -- Or, A Tale of Two $300 Million Exits

Lots of activity in online video platform (OVP) land, as investors' quests for exits heats up. The pitch is inspired by Naughty By Nature's classic early '90s song, "O.P.P." (lyrics here) and its memorable chorus echoed in my headline. (By the way, for you trivia fans interested in what O.P.P. means, check out Wikipedia).

First, as you all likely saw, the OVP world's original gangsta' -- Brightcove -- just filed its amended S-1 in preparation for its upcoming IPO. The company, which ended 2011 with $63.6 million in revenues, hopes to raise up to $70 million at a valuation somewhere in the $300 million range (which represents about a 5X multiple on trailing revenues).

Second, from the "Somewhat Surprising Move" department, Barry Diller's IAC is looking to sell a significant share of rival OVP old-schooler, Vimeo. Vimeo targets a very different market than Brightcove, and apparently -- and very surprisingly -- only generates $5 million in revenues. Yet, despite this huge revenue gap between itself and Brightcove, Vimeo values itself at $300 million as well. Hmmm, let me do the math here -- that's a fairly healthy 60X multiple.

Expect more OVPs seeking exits throughout the course of the year in one shape or form. And, don't be surprised if one of those is Brightcove's biggest rival --- Ooyala. Not original gangstas. But, their moves make them rise with a bullet on the charts. Ooyala v. Brightcove is a classic case of West Coast v. East Coast rap -- Silicon Valley (at least, originally) v. Boston -- yo! (As in OVP IPO, yo!)

One more thing -- if you want to see a train-wreck of Founder behavior, read the comments to the Vimeo post by Vimeo founder -- unbelievable that a Founder would act this way at any time, let alone in a public forum like that! Sad, sad, sad ....