In a major victory for open standards, and fast downloads, Adobe is now adopting the h.264 video codec into the latest version of flash:

Adobe today announced the latest version of its near ubiquitous Web video software, Adobe Flash Player 9. It’s codenamed Moviestar, because it includes H.264 standard video support V the same standard deployed in Blu-Ray and HD-DVD high definition video players. In other words, the quality of video has been substantially improved from the previous version of Flash Player 9.

You might be wondering why this is a big deal, but it means that any industry standard tool can be used to generate/play flash videos and that they will look much better and download quicker.

Now if only they could figure out how to manage the bloat that keeps flash from running efficiently…

Adweek notes (with some irony) that gaming has been far more popular than online video for quite a while:

More than one third, or 34 percent of users in the U.S. play games on the Internet at least once per week. That number bests the two most hyped online activities of the past few years, as 29 percent of users watch videos on a weekly basis and just 19 percent visit social networking sites that often, found Parks.

Casual online games are a ‘Killer App’ for advertisers online because people spend so much time playing them. The longer they play, the more ads they will see. Videos are certainly popular but the short clip lengths make it difficult to embed adverts. Ironically, the study cited time spent on social networking sites as competing against gaming but some of the most popular sections of social networking sites are the gaming areas. Just take a look at some of the most popular Facebook apps if you don’t believe us.

Perhaps then, its not surprising that MTV just announced a half-billion dollar online gaming initiative:

MTV Networks plans to invest well over $500 million in video games, seeing the red-hot entertainment category as a major pillar of growth in its goal to reach consumers wherever they spend time.

The two-year investment is part of a global strategy to incorporate games development at the inception of all new programming plans and not as an afterthought, executives say.

Some critics point out that while gaming has the edge today, growth in video watching will eclipse gaming in the future. These critics are missing out on one secret: people are not interested in a majority passive experience in front of their computers. The Internet enables interactivity and games are the ultimate form of interactive entertainment.

Video may rule the livingroom but games dominate on the computer.

Although we hate to link to a press release, we feel its safe to make an exception for this one as it contains the full text of a letter sent from Google to the FCC. In it, Google seems to hint at how it might revolutionize wireless technology in America even more than the iPhone:

In a filing with the FCC on July 9, Google urged the Commission to adopt rules for the auction that ensure that, regardless of who wins the spectrum at auction, consumers’ interests are served. Specifically, Google encouraged the FCC to require the adoption of four types of “open” platforms as part of the license conditions:

* Open applications: Consumers should be able to download and utilize any software applications, content, or services they desire;

* Open devices: Consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;

* Open services: Third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and

* Open networks: Third parties (like internet service providers) should be able to interconnect at any technically feasible point in a 700 MHz licensee’s wireless network.

Today, as a sign of Google’s commitment to promoting greater innovation and choices for consumers, CEO Eric Schmidt sent a letter to FCC Chairman Kevin Martin, stating that should the FCC adopt all four license conditions requested above, Google intends to commit a minimum of $4.6 billion to bidding in the upcoming 700 MHz auction.

Bulletpoint #2 to “utilize a handheld communications device” seems the most interesting as rumors have long swirled that Google had a skunkworks dedicated to building some sort of mobile device. Buying some spectrum would allow Google to bypass the traditional byzantine world of obsolete wireless carriers and their aged, incompatible wireless protocols. But is being cash-rich and high-tech darling Google enough to jolt the FCC out of languishing in the status quo?

Sometimes these stories just write themselves:

During his keynote address Wednesday at the Digital Living Connections Conference here, Scheinman talked about how digital media is disrupting the tech and entertainment industries. Usually that means talking about networking standards and media servers, but Scheinman’s recommendations, instead, were a bit more pop culture than geek culture.

“A lot of you should go spend time on Facebook and MySpace. Spend time to understand why social media really does matter,” he said. Social communities are the solution to some of the biggest problems facing Hollywood and other content providers in today’s Digital Era, Scheinman said.

[snip...]

(For the record, following a cursory search, Scheinman does not appear to have a Facebook account.)

Despite the clear hypocrisy that is typical of senior Silicon Valley executives (everyone remember the Friendster board members who never had a Friendster profile?) Scheinman does make an interesting point.

Where young people congregate is an excellent opportunity for them to share culture word-of-mouth and research done by danah boyd indicates that teens are quite frequently relegated to hanging out online since paranoid parents don’t let them out of the house.

Scheinman then went on to call Rupert Murdoch a “genius” for purchasing MySpace but of course he forgot to mention that Murdoch hasn’t yet managed to generate any massive profit.

An interesting piece in the LA Times on Sony’s web marketing efforts for Spiderman 3:

All the studios have been directing some of their marketing dollars away from traditional media outlets, primarily newspapers and to a lesser extent network television. Spending on Internet advertising rose from negligible amounts in 2002 to around 4% of promotional budgets last year, according to the Motion Picture Assn. of America.

4% may not sound like very much but we have to keep in mind that the estimated marketing budget for Spiderman 3 is $100 Million (so although Sony did not give out how much they spent online, we can estimate it around $4 Million). Hollywood may be very slow about catching on to using the internet but this is following the exact same pattern that Hollywood followed when first using TV advertising. It took nearly 25 years of competition with television before the studios realized that TV was in fact the ideal medium to promote their films. Hopefully this time, they will embrace the internet a little bit faster.

In one will likely become a textbook example of a bad quote coming back to haunt you, Richard Parsons adressed the 56th annual National Cable & Telecommunications Association conference in Las Vegas with:

“The Googles of the world, they are the Custer of the modern world. We are the Sioux nation,” Time Warner Inc. Chief Executive Richard Parsons said, referring to the Civil War American general George Custer who was defeated by Native Americans in a battle dubbed “Custer’s Last Stand.”

“They will lose this war if they go to war,” Parsons added, “The notion that the new kids on the block have taken over is a false notion.”

Let us look beyond the fact that Parsons is attempting to portray the world’s media giants as underdogs comparable to Native Americans, which is already ridiculous on its surface. Let’s instead look to his larger message: Custer may have lost his last stand but while they may have won the battle, ‘manifest destiny’ ultimately steamrolled the Sioux nation.

Other than ridiculous statements, it seems that the official old-media stance on Google being a “frenemy” is now morphing into just plain “enemy” (much as we predicted back when the “frenemy” term was first coined).

While everyone and their brother are tripping over themselves to share in the orgy of User Generated Content (UGC) a couple of striking events in the last couple of days has shown that it can be fraught with danger. The first event was the hilarious "riot" that ensued over at Digg.com when the administrators exercised censorship over the theoretically user-controlled news process.

Nerd anarchy? An e-Rebellion? Or just mob justice… which ever way you look at it social news site, Digg is facing the greatest crisis of its young life. The front page of Digg has been taken over by stories about and related to a hacked HD-DVD key.

To recap, someone has posted a link to a story about the said key getting cracked, and included the key in the title and description of the story. Digg staff took down the story, fearing that it would get sued by MPAA, as outlined in this blog post by CEO Jay Adelson.

This resulted in a proverbial take-to-the-streets riot, and now most of Digg front page stories are either related to the key-story, or are variants of the original deleted story.

In the end, the site’s administrators caved-in to the rioters, virtually guaranteeing that the tactic will now become a regular occurrence on their site. Good going guys! We look forward to the next riot and we think that Kevin Rose should start practicing his “we don’t negotiate with terrorists” speech in preparation for it.

But Digg’s cowardice in the face of adversity pales in comparison to the stupidity of the Barack Obama campaign staff. Back in 2004 a Barack fan named Joe Anthony created a fake Barack Obama myspace account for the senator which became rather popular for obvious reasons and then…

After Obama entered the presidential race, the campaign initially worked with Anthony to suggest improvements and Anthony even shared the site’s password so the campaign could make its own tweaks. When MySpace created a channel featuring profiles of presidential candidates, the Obama campaign chose not to create an official profile but instead suggested Anthony’s page, which already had a large following.

But as the campaign progressed and the network surrounding the page exploded to 160,000 online friends, the Obama campaign decided it should control the content and responses to MySpace users who sent messages.

We’re sure that working a presidential campaign can be stressful and expensive but outsourcing your online strategy to random, unpaid fans is a clear recipe for disaster. We just want to know who thought it was a good idea to NOT create their own official myspace profile. Were they really so lazy as to not want to deal with the most critical medium for reaching young people? You might want to reconsider voting for him if this is a sign of things to come.

If you thought the iPhone redefined the relationship between Silicon Valley and the U.S. cell carriers, you ain’t seen nothin’ yet:

The venture capitalists L. John Doerr and James L. Barksdale have joined an investment group that is promoting a plan that would open a portion of the radio spectrum for both uses, through technologies flexible enough to support both next-generation wireless Internet devices and public safety emergency communications.

The plan is being put forth by Frontline Wireless, formed earlier this year by Reed E. Hundt, the former Federal Communications Commission chairman. Frontline Wireless is one of several potential bidders for spectrum in the 700 MHz band, used until now by UHF television, that is being opened up by the move to digital.

Mr. Hundt said that Frontline had begun building an investor group, which would ultimately include large banking partners, to participate in the auction. Significantly, the company’s first public investor was K. Ram Shriram, an early Google investor and board member and managing partner of Sherpalo Ventures.

American technologists have often complained about the poor status of domestic cellular and broadband technologies, often accusing them of holding back the great internet revolution. As the old saying goes, if you can’t beat ‘em, join ‘em.

Rather than continuing to complain, Silicon Valley has decided to pursue what it does best which means they’re just going to have to do it themselves. In the end, why would the incumbents contribute to their own demise? It was nice that Apple could work out a deal with Cingular/AT&T;but its a whole new ballgame when tech companies like Apple have obsoleted them out of existence.

Continuing on our theme from last week of Silicon Valley becoming a media capital, Robert Young over at GigaOm speculates that Google might soon cut its own distribution deals:

The parallels between an existing media company’s business model and the one that Google is pursuing are pretty strikingly similar, aren’t they? And as you click down further, you start to wonder what will stop Google from eventually going directly to the Bruckheimers of the world, cutting out the broadcast networks as middlemen?

Tom Evslin points out that the bandwidth crunch isn’t necessarily in the last-mile to our houses:

But wait, you say, my Internet connection already comes into my house on my cable.  And so do all 200 channels.  So I’ve already got enough bandwidth.  You’re right; you do.  It just has to be rearranged a little.  And remember, you’re not even gonna need to bring in 200 channels at once, just the ones you’re actually watching. Maybe you should get a rebate.

His argument is that the real network crunch is further up the chain, back at the telecom end.

Many of you have probably already read Neal Gabler’s ”The Movie Magic is Gone” and if you haven’t you should go give it a read now.

Now, however, when people prefer to identify themselves as members of ever-smaller cohorts — ethnic, political, demographic, regional, religious — the movies can no longer be the art of the middle. The industry itself has been contributing to this process for years by targeting its films more narrowly, especially to younger viewers. In effect, the conservative impulse of our politics that has promoted the individual rather than the community has helped undermine movies’ communitarian appeal.

All of this has been hastened by the fact that there is now an instrument to take advantage of the social stratifications. To the extent that the Internet is a niche machine, dividing its users into tiny, self-defined categories, it is providing a challenge to the movies that not even television did, because the Internet addresses a change in consciousness while television simply addressed a change in delivery of content. Television never questioned the very nature of conventional entertainment. The Internet, on the other hand, not only creates niche communities — of young people, beer aficionados, news junkies, Britney Spears fanatics — that seem to obviate the need for the larger community, it plays to another powerful force in modern America and one that also undermines the movies: narcissism.

We’re not sure if we buy Gabler’s argument. It has less to do with narcissism and more to do with media savvy audiences realizing that a handful of studio executives no longer have the tight-fisted control of distribution.

‘Former FT reporter” Tom Foremski has an interesting musing on the shift of media power from East coast to West:

Silicon Valley is rapidly turning into Media Valley--and New York, NY should look out--the capital of the media world is shifting about 3,000 miles westwards.

Some of Silicon Valley’s largest companies are media companies: Google, Yahoo, EBay, for example are media companies--they publish pages of content and advertising around it.

Some of the most interesting and most valuable new Silicon Valley companies, such as Youtube, Facebook are based here in Northern California. So is Craigslist, the seventh largest online media company in the English language world (in terms of traffic).

Take a look at Business 2.0’s 25 startups to watch and look at how many of these mostly “social” media and advertising companies and are based in the Bay Area:18. Only two are based in New York.

But if you work in Manhattan you feel at the center of the media universe. Midtown and the Avenue of the Americas is where the capital of the media industry has sat for many decades.

We find it particularly prescient that Tom classifies several “technology” companies as media companies as soon as you realize their money is made from eyeballs. The media deals would indeed look very different if Google & Ebay were considered media firms. But ‘Old’ media isn’t so blind either, this is why they refer to Google as a “Frenemy.”

In what is easily the most useful thing we’ve seen online in a long time, some blogger uploads the same video to 25 different video sharing sites and then places them side by side on one giant page so that you can all see the results. Want to know who will make your video look best? Look no further.

Just when you thought the battle would get really ugly:

The format war around next generation DVDs may be over before it has begun, thanks to a breakthrough from a British media technology company.

Britain-based New Medium Enterprises (NME) said on Tuesday it had solved a technical production problem that makes it possible to produce a cheap multiple-layer DVD disk containing one film in different, competing formats.

People who think that the slow uptake of HD-DVD and BluRay is only because of the format war are missing the big picture. High cost and high bandwidth means that the age of the expensive shiny disc are coming to a close.

Competition does a funny thing to corporations, sometimes it even makes them consider changing their ancient patterns:

If you work at NBC Universal, beware the ides of September. Peacock staffers are sweating bullets over the impending release of what the company is calling TV 2.0, a proposed top-to-bottom reorganization of the network to streamline it for the Internet age.

Still ranked in last place among the TV networks, NBC is now deciding that some urgency has entered into the Internet-TV equation. We’ll wait and see whether they see the light or are merely adding new window dressing.

A few postings ago we thanked our lucky stars that the FCC doesn’t regulate the Internet. We should be careful what we wish for:

Martin said he didn’t think the FCC had the authority to regulate online content, as it does with broadcast, but that doesn’t mean he wouldn’t like to. He told Senator Mark Pryor (D-Ark.) that he thought “all policymakers should try to make the Internet a more decent place,” but said that was a challenge, pointing out that it had been challenging enough in the broadcast space, where the FCC does have authority to regulate decency.

1. He admits they have no right to regulate the net.
2. He admits that they’ve done a terrible job regulating TV & Cable.
3. He still wants to regulate the net.

Scared yet?

As if filmschools weren’t pathetic enough, ASU has decided to outdo them all. They are starting a Masters film program that they call “EnterTech” that is a combo of entertainment and technology (what a brilliant idea):

David A. Young, vice president and dean of the College of Liberal Arts and Sciences, said the university was moving in the direction of mixing disciplines. ‘’We live in a trans-discipline world,’’ he said. ‘’If you look at the big issues facing society, like curing cancer, it won’t be cured from a one-discipline approach.’’

The EnterTech certificate follows on the heels of another new hybrid program, an earth- and space-exploration degree that combines engineering with science.

Dr. Young and Dr. Lehman pitched the EnterTech idea in the spring to a group of industry professionals at the Beverly Hilton Hotel in Los Angeles, but also listened to what Hollywood had to say.

‘’They’re saying, ‘We have a problem,’ ‘’ Dr. Young recalled. ‘’ ‘Convergence is happening, but we’re not turning out people who understand it.’ And all the production people were saying: ‘Don’t start another production program. That’s not what we need.’ ‘’

There is actually commonalities between Engineering and Science. However, this touchy-feely “entertainment + tech” crap is just a new way to exploit those desperate 18 year olds with visions of Hollywood glamour dancing in their heads. Hollywood always finds a way to spit on academia’s feeble film student output and now they are going to take it to a whole new level. Would you hire one of them? (The correct answer is “only if they read BBB").

Good luck kids, we’ll be looking out for you in the CAA mailroom.

And it brainwashes you better too:

Prime-time ABC television shows were viewed more than 11 million times on the Web in the first month of a test by the Walt Disney Co of whether consumers will watch ads online if the shows are free.

An online exit survey posted the first week of the two-month trial showed that 87 percent of respondents could recall the advertisers that sponsored the episodes they watched.

That compares with typical ad recall of about 40 percent for commercials viewed on television, industry sources said.

A retooled version of the free site, which incorporates data gathered during the test, will be launched in the fall, Disney officials said.

We swear we are not making this up:

News Corp.’s MySpace.com will begin selling episodes of Fox’s “24” next week as part of a plan to turn the popular teen Web site into a business rivaling Yahoo Inc. and Apple Computer Inc.’s iTunes, according to the Wall Street Journal.

MySpace, one of the fastest growing Web properties, will begin selling episodes of the show “24” for $1.99 per episode from seasons one and five, the report said.

While we are more than happy to see everyone and their grandpa get in on the IPTV bandwagon, it is a little disappointing that no one is competing on price or features. Folks, do we have to wait for Wal Mart to step in and offer TV downloads for $1.79?

Feel free to send us your guesses for who will start selling TV downloads next. 

Remember when people like George Lucas said they were looking forward to using digital tech to replace sets and actors? Those “movies” already exist, they’re called videogames:

Activision will be opening a dedicated studio facility on the DreamWorks Animation campus in Glendale, California, following on the heels of their strategic alliance. The move, which establishes an unprecedented level of collaboration between a Hollywood studio and a videogame company, will facilitate simultaneous co-development between DreamWorks’ 3D-animated features and Activision games based on those films.

“This announcement marks an unparalleled step in the convergence between Hollywood and videogames,” stated Robert Kotick, chairman and ceo, Activision Inc. “For the first time, we will be able to align our games’ production schedules with the movies’ from the pre-production phase onward. This will allow us to fully leverage the movie assets and storylines, in addition to collaborating closely with the talented production teams at DreamWorks to develop storylines that expand the movie experience in new and compelling ways.”

While Hollywood has a very spotty track record turning games into films, the gaming industry has done a good job of increasing the quality of their output to become more “cinematic.” As every E3 convention every year shows, movies and videogames have long been on a collision course, especially since large chunks of nearly every studio film has gone through digital manipulation of some kind.