It’s not quite IPTV. Not quite Internet video. It’s somewhere in between. It’s the delivery of TV of movies over the Internet to set-top boxes.  Think of past companies like Akimbo or Moviebeam. They focused on movies. Start-up Vudu is using a set-top box as well, but it’s mashing that with peer to peer technologies.

The Wall Street Journal has a story about KyLinTV, which delivers Chinese TV, movies and video to immigrants living in the U.S. It’s a different kind of market, because it’s so niche-y and because the content is delivered to the TV. And because the content is delivered over the public Internet via broadband.

Weird, eh?

KyLinTV costs $30 a month and has 31 Chinese TV channels. From the WSJ:

The technology company behind KyLinTV is NeuLion Inc., a Plainview, N.Y., start-up that sells a new streaming-video technology. It enables KyLinTV and other companies to deliver programming via the Internet to the TV sets of small but passionate audiences for topics such as Cuban baseball, religious programming and television shows in Africa.

These niches allow NeuLion to target very specific audiences that are willing to pay extra for TV that they miss receiving. It’s not Hollywood blockbusters or recent TV hits. It’s tried and true content that people will pay for. So far, KyLinTV has around 25,000 subscribers and will apparently break even once it hits 30,000 subscribers, according to NeuLion.

The downside? It’s YASTB (yet another set-top box). Most people won’t want yet another box to crowd next to the DVD player, Wii, cable box or Tivo. But since this is niche content to niche audiences, people are paying. And having content delivered via the Internet cuts down on a managed network, like say IPTV.

NeuLion will probably have success in this market, but how long will it really be sustainable? Guess we’ll have to wait and see.

Popularity: 17% [?]

According to a survey by Park Associates, just one in five users (21%) are satisfied with videos they download from the Internet.

The definition of downloaded videos, Parks says, can be anything downloaded from peer-to-peer networks like LimeWire or BitTorrent, which are usually illegal DVD rips of or TV shows. It can also mean legitimate movies or shows like those available for purchase from iTunes.

The data was broken down between “Video Downloaders Not Using P2P Networks” and “All Video Downloaders.” See the chart below:

Interestingly, the percent of satisfied users jumps from 12% to 21% when counting all downloaders including those using legitimate services. Users downloading video from peer-to-peer systems are likely to be unsatisfied with the quality of the video, since they are usually lower-quality than legitimate pay services.

Here’s a quote from the Parks’ press release:

“People don’t see a reason to use video downloading services,” said John Barrett, director of research at Parks Associates. “Sure, it saves a trip to the video store, but it takes longer, looks worse, and you end up watching it on a 17” screen. No wonder consumers are dissatisfied with the experience.”

However, that’s not always the case. A growing number of movies available on BitTorrent are DVD quality because they are actually DVD rips, with very little compression. Users can specifically search for DVD-quality files, rather than go for lower-quality Divx encoding, for example.

Searching for something like “Spider-Man ISO” will bring up high-quality DVD rips saved in ISO format, which makes it easy to burn it back into a DVD. Once you burn it into a DVD, it’s practically indistinguishable from the original DVD since it comes with chapters, titles and all the special features. The downside is that a) it’s illegal since DVDs need to be ripped of their copy protection and b) ISO files are huge.

Full-length movies encoded with Divx are usually 650MB, while ISO files are usually 1.2GB. That’s double the size and a big difference in downloading time, but a huge difference in quality.
Anyway, I suspect that many people aren’t using ISO files anyway. Only hard-core users who love quality video would take the time to download an ISO, burn it onto a DVD then watch it (either on a TV or computer).

One more point. Despite what Parks says, I think it’s possible that people taking the survey may not have known the difference between downloaded and streamed video. Lots of people don’t know the technical differences and wouldn’t be able to accurately define what “streaming” is.

I know, because I used to work for a company (and website) called Streaming Media (and wrote a book), and I always had to explain what “streaming” meant.

But perhaps consumers are more savvy about video now that we’re in the age of YouTube. Until I see the entire report this data is based on, I wouldn’t use these numbers anywhere or put much weight to them.

Bonus data:

16% said the selection of online videos is good
13% said video downloads are sold at a reasonable price.
Less than one in five people said they would download videos again in the future.

Technorati Tags: online movies, itunes, bittorrent, peer to peer, Internet movies, streaming, streaming media

Popularity: 20% [?]

A brand new peer-to-peer company called Oversi announced that it received funding from Cisco, totaling $8 million. Other investors include Carmel Ventures, StageOne Ventures and TempoPark Fund.

Now here’s the interesting thing: It’s impossible to know what Oversi is really doing. The press release talked about peer to peer streaming and caching. Their website was equally vague. The title bar on their website says “P2P Caching for ISPs”.

The ‘About Us” page says this:

Oversi offers innovative solutions for P2P networks in today’s fast-growing Internet TV and video age. Oversi’s solutions enable ISPs to optimize their network performance, ease P2P traffic pressure and save on bandwidth. The same Oversi platform also helps ISPs to increase revenues and enhance user stickiness through new value-added-services, such as premium content delivery and online storage.

The press release says that using Oversi’s P2P solutions, “service providers can deliver up to 20 times more bandwidth using their existing infrastructures, instead of investing billions of dollars in expensive upgrades.”

Lots of PR gobbledy-gook. For a better explanation, here’s what Light Reading had to say:

Here’s how it works: Oversi’s servers, or peers, form a grid in the operator’s network, catching and caching any video content that is transported in a P2P format (like BitTorrent). Every time a user downloads a P2P file, pieces of that file are stored at Oversi’s servers. When another user on the network requests the same file, it’s accessed from Oversi “peers” close by rather than from the far-away server where the file originated, which would eat more bandwidth and take longer.

Seems like Oversi is good at attracting investors, however. In December, the company had its second round funding for $6 million. That’s $14 million in just about 7 months.

Popularity: 17% [?]